Stronger Dollar Pressures Metals as Oil Rebounds on Iran Supply Risks

Key Moments

Risk Sentiment Shifts as Precious Metals Slide

Gold continued to decline on the final trading day of the week. The drop was driven by a stronger US dollar and a rebound in risk appetite, which reduced demand for safe-haven assets. At the time of writing, gold was trading below $4,600. It struggled to break resistance near $4,640.

“Safe-haven demand has eased as geopolitical risks around Iran have temporarily diminished,” said David Morrison, senior market analyst at Trade Nation.

Morrison added that US President Donald Trump does not appear inclined to pursue military action. He noted that Trump “stated the regime claims the protestor massacres have ceased and that those arrested will not face the death penalty.”

“Improved risk sentiment has boosted equities,” Morrison continued. “While the Fed may ease monetary policy this year, rates are expected to remain on hold until summer.” This combination has weighed on gold, which offers no yield.

Silver also came under pressure, dropping below $90 per ounce. COMEX silver was quoted at $88.15, down more than 4.5%. The metal pulled back sharply after reaching record highs earlier in the week.

Morrison commented: “The question for traders is whether these selloffs signal a sharp correction or are simply building momentum for another squeeze higher.” He added that silver remains deeply overbought on a daily MACD basis—roughly double the level at the peak of its previous bull market in April 2011.

Oil Recovers as Iran Stays in Focus

Oil prices moved higher after a sharp decline in the prior session. Crude benchmarks advanced more than 1% on Friday. Uncertainty over Iranian supply encouraged some buying at lower price levels.

“Developments in Iran are currently the decisive price driver on the oil market,” said Barbara Lambrecht, commodity analyst at Commerzbank AG.

At the time of writing, West Texas Intermediate crude traded at $59.87 per barrel, up 1.2%, while Brent crude was at $64.46 per barrel, a 1.1% increase from the previous close.

Earlier in the week, both WTI and Brent reached multi-month highs, driven by protests in Iran and indications from President Trump about possible military strikes. The rally stalled on Thursday when oil dropped by $3 as investors reassessed the likelihood of immediate US action.

Risks tied to Iran remain. Concerns extend beyond potential reductions in Iranian exports, reported at nearly 1.9 million barrels per day in autumn. Lambrecht highlighted, “Above all, there are worries about a possible blockade of the Strait of Hormuz by Iran in the event of an escalation. Around a quarter of seaborne oil supplies flow through this route.”

She also suggested that if tensions ease on a sustained basis, the market focus could shift back toward Venezuela. Oil volumes previously under sanctions or restrictions might gradually reenter the global supply pool.

Base Metals Retreat on Stronger Dollar and Regulatory Headlines

Base metals came under pressure to close out the week, with copper, aluminium, and zinc all declining. A firmer US dollar and reports of a crackdown on high-frequency trading in China weighed on sentiment after a volatile period in mainland futures markets.

Neil Welsh, head of metals at Britannia Global Markets, noted that the pullback followed a dramatic week in which aggressive futures trading had previously pushed prices higher globally.

The stronger dollar made commodities priced in US dollars more expensive for buyers using other currencies. This dampened demand and put downward pressure on prices.

Welsh noted that market attention shifted from US tariffs to macroeconomic data. A stronger-than-expected initial jobless claims report, along with firm messaging from several Federal Reserve officials, boosted the dollar and weighed on copper.

Fed policymakers emphasized their focus on containing inflation and maintaining restrictive monetary conditions. They signaled that rate cuts are unlikely in the near term.