Commodity markets continue to reflect a combination of fiscal concerns, geopolitical uncertainty, and physical supply pressures, with gold extending its recent rally while energy markets assess the implications of potential new sanctions on Iran and copper remains near record levels.
Gold trades at approximately $4,661 per ounce, up 1.26% on the day after briefly exceeding $4,700 and reaching its highest level since mid-May. The metal has now recorded three consecutive weekly gains, including an advance of more than 5% last week.
The latest move has been supported by renewed fiscal concerns following the US Treasury’s decision to increase long-end bond buybacks. The development has strengthened demand for hard assets, while ETF flows indicate growing institutional participation. GLD recorded $1.22 billion of inflows in the latest session, bringing its three-day total to $3.19 billion and lifting fund assets to their highest level since May 14.
Silver has also advanced, although its gains have been more moderate than gold’s during the latest session.
Oil markets, meanwhile, are consolidating following a strong two-week rally. Brent trades at approximately $93.10 per barrel and WTI at $85.56, with both benchmarks declining during the session after gaining roughly 13% over the previous two weeks.
Investors are awaiting details of the US plan to economically isolate Iran. Oil markets are balancing the prospect of tighter Iranian supply against the possibility that a widely anticipated sanctions package is already reflected in current prices.
Physical flows through the Strait of Hormuz have been less disrupted than initially feared. Recent transit volumes have improved, although longer-term averages remain considerably lower. Crude shipments have continued, but elevated shipping costs have created greater disruption for refined petroleum products.
The medium-term supply outlook nevertheless remains tight. Morgan Stanley raised its Brent forecasts to $90 per barrel for the third quarter, $100 for the fourth quarter, and $95 for the first quarter of 2027, citing expectations for a slower recovery in Middle Eastern supply.
Natural gas markets continue to show significant regional differences. US Henry Hub prices have moved modestly higher, while European TTF futures reached a five-month high. European gas storage remains only 62% full compared with a five-year seasonal average of 80%, creating significant concerns ahead of winter and potentially increasing competition with Asia for LNG supplies.
Copper remains another major focus. LME three-month copper continues to trade above $14,200 per metric ton, close to record levels following a significant physical supply squeeze. Withdrawal orders from LME warehouses increased sharply, signalling that physical buyers continue to remove metal from available inventories.
Tariff-related arbitrage remains an important driver, with US import policies encouraging buyers to draw copper from international markets and tightening availability elsewhere. Copper has now gained approximately 14% year-to-date in London, while the strength of the market has also supported major producers, including BHP.
Overall, commodity markets remain shaped by a combination of geopolitical risk, fiscal concerns, and tightening physical supply. Gold continues to benefit from increased demand for hard assets, energy markets remain highly sensitive to developments involving Iran, and copper’s physical market continues to demonstrate significant underlying tightness.
