Geopolitical developments are once again dominating commodity markets, with oil and European natural gas prices remaining elevated following renewed US-Iran tensions in the Strait of Hormuz. Precious metals, meanwhile, are under pressure as stronger US employment data reinforces expectations for higher interest rates.
Brent crude trades at $96.76 per barrel, while WTI stands at $91.56. Oil's recent advance has slowed after Iran indicated that an agreement with Oman on a temporary safe shipping route through the Strait of Hormuz could be only days away.
The potential agreement has limited the upside following the weekend's escalation, when the US military struck three Iranian tankers and Tehran threatened a stronger response while announcing plans for a new restricted zone outside the Strait.
The range of potential outcomes remains wide. Goldman Sachs has indicated that oil could reach $120 per barrel if shipping disruptions broaden and intensify. US Energy Secretary Chris Wright has also confirmed that the US Navy will continue escorting tankers through Hormuz until Iran stands down, suggesting that disruption risks could persist.
European natural gas is experiencing an even sharper move. TTF front-month futures have risen 2.47% to €73.73/MWh after briefly exceeding €75, approaching a three-year high.
Europe's existing storage deficit is amplifying the impact of geopolitical risk. Gas inventories remain below the region's 75% target, requiring an unusually rapid pace of injections late in the summer to rebuild inventories ahead of winter. US Henry Hub prices, by contrast, remain broadly unchanged at $2.92/MMBtu, highlighting the relative insulation of domestic US gas markets from disruption in the Strait of Hormuz.
Precious metals are moving in the opposite direction. Gold has declined 0.70% to approximately $4,399 per ounce, while silver is down 0.90% to $65.61.
The decline follows stronger-than-expected US employment data, which strengthened the case for a Federal Reserve rate increase at the September meeting and created a headwind for non-yielding assets. Gold briefly moved below the psychologically important $4,400 level.
This comes despite continued ETF demand. Total gold ETF holdings have risen to 99.2 million ounces, their highest level since April, with net purchases remaining positive year-to-date.
Copper remains close to historically elevated levels, with LME copper last trading at approximately $14,416 per metric ton. The longer-term supply picture continues to attract attention as global mine production declined 1.1% during the first half of 2026. Weak output from several major producers has raised the possibility of a rare annual decline in global copper mine supply.
Iron ore has also moved higher, breaking above $100 per metric ton for the first time in seven weeks. Prices reached $101.10 in Singapore, supported by expectations for Chinese restocking ahead of the holiday period and elevated freight costs.
Commodity markets remain highly sensitive to developments in the Strait of Hormuz, with energy markets carrying a substantial geopolitical premium. At the same time, expectations for higher US rates are weighing on precious metals, while constrained mine output continues to underpin copper's structural supply story.
