Oil Surges 2.6% as US-Iran Trade Weekend Strikes; Gold Eases to $4,521

The Iran ceasefire deal that dragged Brent crude down 19% in May has unravelled over the weekend. The U.S. struck Iranian sites on Goruk Island and Qeshm Island on Saturday; Iran's Revolutionary Guard answered Monday by targeting a U.S. airbase. Israel, meanwhile, ordered troops deeper into Lebanon against Hezbollah — days after hosting peace talks in Washington. The combined result: oil back above $89 (WTI), gold giving back Friday's two-week high, and copper quietly catching a bid on a different story entirely.

Friday's session had already priced in a near-done U.S.-Iran ceasefire extension — Brent fell 1.7% and WTI fell 1.7%. Then the weekend changed the picture.

The U.S. said it conducted "self-defence strikes" on Iranian radar and drone control sites in Goruk and Qeshm Island, describing the action as a response to "aggressive" moves by Tehran. Iran's IRGC said on Monday its aerospace unit struck a U.S. air base in return. 1

In parallel, Israeli Prime Minister Netanyahu ordered troops to push further into Lebanon against Hezbollah — this after Washington hosted Israeli-Lebanese peace talks on Friday. The U.S. has since proposed a "gradual de-escalation" plan under which Hezbollah would halt attacks in exchange for Israel not escalating in Beirut, but the overlap with active fighting makes any near-term deal look unlikely.

Mines in the Strait of Hormuz are the unresolved X-factor. IG analyst Tony Sycamore noted in a Monday briefing that concerns are rising about additional mines in the strait — an Axios reporter posted on X Friday that Iran had dropped fresh mines shortly after U.S. Defense Secretary Pete Hegseth warned that doing so would violate the ceasefire. "Even if an agreement is reached, it won't deliver a flood of supply," Sycamore wrote. 1

Goldman Sachs said late Sunday that weak oil demand from China and Europe poses a major downside risk to its Q4 Brent forecast of $90 and WTI forecast of $83. China's official PMI for May came in flat, with factory activity stalling under export contraction and cost pressure.

Equities to watch: Exxon Mobil (XOM), Chevron (CVX), ConocoPhillips (COP) benefit from higher WTI; refiners Valero (VLO) and Marathon Petroleum (MPC) face margin compression if crude outpaces product prices. Super-major BP (BP) sold a 5% Browse LNG stake to GS Energy this morning — consistent with portfolio reshaping toward higher-margin assets during the supply-disruption cycle.

Spot gold pulled back to $4,521 in early Asia-Pacific trading — down about $18 from Friday's close of $4,539 — as the dollar strengthened on the same geopolitical risk that lifted oil. 3

The dynamic here is classical: oil up → inflation fears up → Fed rate-hike probability up → dollar stronger → gold cheaper for non-dollar holders. Fed Vice Chair for Supervision Michelle Bowman said Friday that an extended energy shock from the Middle East war "could lead to persistent inflation that might require tighter monetary policy." 3

Gold is still $156 above the 200-day moving average (~$4,365) it briefly breached on May 28. Silver is actually up 0.7% to $75.81; platinum and palladium each gained more than 1%, suggesting metals demand beyond the safe-haven narrative.

Trump said Friday he would "soon decide" on the proposed ceasefire extension. Until that decision lands — or the deal collapses — gold is caught between inflation support and the rate-hike headwind.

Equities to watch: Barrick Gold (GOLD), Newmont (NEM), Agnico Eagle (AEM) track spot gold. A sustained break above $4,600 would put UBS's $5,500 year-end target back in focus.

Copper's Monday gain has less to do with Iran and more to do with a calendar date: the U.S. Commerce Department must submit its updated recommendation on refined copper tariffs to President Trump by June 30. The currently proposed plan — a phased 15% tariff starting January 2027 — has been under review. 4

The tariff risk is driving CME copper to a persistent premium over LME. Pre-positioning — metal flowing into U.S. ports ahead of potential levies — has tightened near-term availability. Goldman Sachs lifted its LME copper year-end forecast by more than 10%, from $12,465/t to $13,735/t, citing weaker-than-expected mine supply and U.S. strategic stockpiling. 5

Copper ended May up 5% — the best single commodity in our coverage basket for the month.

Equities to watch: Freeport-McMoRan (FCX), Southern Copper (SCCO), Lundin Mining (LUN.TO), and Antofagasta (ANTO.L).

Corn and soybeans bounced in early Asian hours, with grain traders in Singapore pointing directly to oil prices: "We have higher oil today, which is directly supporting the grain and oilseed markets," one trader told Reuters. "We will see more grains and oilseeds being diverted to make biofuels if energy supplies continue to remain tight." 6

The biofuel linkage between energy and ag commodities has been a consistent theme since the Iran war began in late February.

Wheat gained 0.3% but faces a ceiling: Northern Hemisphere harvests are approaching and Russia's agriculture consultancy Sovecon raised its 2026 Russian wheat crop forecast to 90.3 million metric tons. India, however, is projecting an El Niño-weakened monsoon — the lowest rainfall in 11 years — which adds a food-inflation tail risk to South Asian markets.

Iron ore slipped marginally (−0.38%), with China's May PMI confirming a stall in factory output. Rebar edged up 0.67% and hot-rolled coil +0.59%, suggesting Chinese mills are running but cautious on raw material restocking.

Equities to watch (grains/agri): Archer-Daniels-Midland (ADM), Bunge (BG), Mosaic (MOS). Iron ore names: Rio Tinto (RIO), BHP Group (BHP), Fortescue (FMG.AX) — Barclays upgraded Boliden last week on copper exposure.

The ISM number lands today at 14:00 GMT. A reading below 50 — contraction — would sharply complicate the hawkish Fed narrative and likely push gold up and oil down. NFP Friday is the week's macro anchor: a sub-80k print with unemployment holding at 4.3% could revive recession concern; a beat (>115k) would reinforce the rate-hike case.

The Iran ceasefire binary remains the dominant commodity risk. A signed extension sends Brent toward the low $80s; a breakdown keeps WTI above $90 and reignites the gold safe-haven trade above $4,600.