Copper prices break through! First weekly gain since the US-Iran conflict, gold rebounds 4% intraday, still down for four consecutive weeks

As the Middle East fighting enters its fourth week, the commodity markets have diverged this week—industrial metals have steadied and rebounded, while gold has still been unable to shake off its weakness after a sharp intraday bounce.

London copper is up more than 2% this week, marking the first weekly rise since the outbreak of the Iran–Iraq conflict. A steep drop in China’s inventories and the resulting improvement in demand expectations are the main drivers.

When U.S. stock futures refreshed their intraday highs on Friday’s early trading, spot gold rose to above $4,554.90. It was up nearly 4.1% on the day. The NY COMEX front-month gold contract climbed to $4,552.10, with an intraday gain slightly exceeding 4%.

But after a plunge of more than 10% on Monday alone, the front-month gold futures contract is still down nearly 2% for the week, continuing its four-week losing streak and setting the longest weekly decline in nearly three years.

Trump again delayed the final deadline for striking Iran. The market holds some expectations that the conflict could be de-escalated, but Iran rejected the 15-point ceasefire plan proposed by the United States. Missile exchanges between the two sides have continued, and tensions have not meaningfully eased. Oil prices have held above $110 per barrel, inflationary pressure has not gone away, further compressing the Federal Reserve’s rate-cut room—markets have fully priced in expectations that there will be no rate cuts in 2026.

Industrial metals mostly rose this week; LME tin rose nearly 6% for the week

Base metals traded on the London Metal Exchange (LME) have broadly regained ground this week.

London copper posted a weekly cumulative rise for the first time since the outbreak of the Iran–Iraq conflict, in sharp contrast to the three straight weeks of declines beforehand. LME copper futures closed up $48, up nearly 0.4%, at $12,195 per metric ton. The contract is up 2.22% for the week.

LME tin was the standout performer on Friday. LME tin futures closed up $1,663, up nearly 3.77%, at $45,788 per metric ton, hitting a new high since March 17 and up 5.8% for the week. The full-week gain also led among base metals.

LME aluminum rose 2.52% this week, LME zinc gained 1.57%, and both have continuously hit more than one-week highs for several days. LME nickel finished up modestly by 0.98% this week, but it fell for the second consecutive day on Friday. LME lead was flat on the week.

Aluminum’s strong performance has a special backdrop— the Strait of Hormuz is effectively under blockade, cutting off about 9% of global aluminum supply. According to reports, a Japanese buyer this week agreed to pay the highest aluminum purchase premium in 11 years. This cost pressure is likely to be passed down to downstream manufacturers, further exacerbating inflation.

China demand rebound provides support for copper prices

The core driver behind copper’s rebound this week comes from signals on the China demand side.

According to reports, copper inventories at the Shanghai Futures Exchange recorded the largest single-week decline since the beginning of this year this week, representing the second-largest single-week drop on record. Analysts believe that the sharp fall in copper prices previously triggered manufacturers’ replenishment demand, and orders have started to pick up.

However, market sentiment has not turned fully positive yet. Harry Jiang, a trader at C&C Ningbo Group, said that although the U.S. side has offered some talk about negotiations, in reality tensions have barely eased at all: “Many traders are taking a wait-and-see approach.”

Uncertainty in the Middle East remains a key macro factor weighing on industrial metals. Ongoing conflict has driven up energy and fertilizer prices, worsening global inflation expectations, dragging down prospects for economic growth, and leaving industrial demand outlook under pressure.

Gold sets its longest streak of consecutive weekly declines in nearly three years

Gold rebounded during Friday’s trading session, but it was unable to reverse the week’s decline.

COMEX March gold futures on Friday’s session on the New York market rose 2.66%, to $4,492 per ounce. The contract is down 1.72% for the week, marking the longest streak of weekly consecutive declines since April 18, 2023. Over the most recent four weeks, it has fallen 14.12% cumulatively.

RJO Futures’ senior market strategist Daniel Pavilonis said this pullback creates a buying opportunity: “The market has fallen sharply… the price has broken below the 200-day moving average… this is a rare buying opportunity.” He expects gold prices to gradually move higher over the coming weeks, adding that once the situation in Iran eases, the market will have a better chance for a repair of risk appetite.

Gold’s safe-haven appeal is being questioned; central bank selling adds extra pressure

This unusual run in gold has prompted deeper reflection among Wall Street institutions about its safe-haven properties.

In a research note, Saxo Bank analyst said that the current price action shows that, “In macro shocks driven by supply, gold has shifted into a source of liquidity. Its behavior is more like a risk asset—moving in the same direction as overall market stress—and it has not provided traditional safe-haven support.”

Julius Baer analyst Carsten Menke pointed out that central banks’ gold reserve sales are adding additional pressure on gold prices. He said that since the outbreak of the Iran war, Turkey has sold about 54 tons of gold to support the lira, and Poland is also considering selling. Menke emphasized that passive selling is more worrying than active rebalancing, because the former lacks controllability, and he expects short-term volatility to remain elevated.

Even so, some institutions still maintain optimistic long-term views on gold.

Deutsche Bank raised its gold price forecast, lifting its year-end target price from $4,900 per ounce to $5,000 per ounce, believing that the recent pullback is unlikely to be sustained. The bank expects the Iran war to end in spring, at which point expectations for the Federal Reserve’s interest-rate hikes will cool, and it judged that the Federal Reserve will resume rate cuts later this year, totaling about 75 basis points of cuts by mid-next year.

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