Global commodity markets rallied on Friday after US President Donald Trump signaled a peace deal with Iran could be signed as early as this weekend, easing fears of prolonged disruptions to energy and industrial metal supplies. The prospect of détente lifted copper more than 2% from a three-week low and sent gold on course for a second straight weekly loss, while also stirring optimism that a reduction in geopolitical risk premiums might benefit broader risk assets, including cryptocurrencies.
Copper Surges on Trade Normalisation Hopes
Three-month copper futures on the London Metal Exchange jumped to $13,694.63 per ton, up 1.6% on the day. The metal had been under pressure from rising energy costs and supply chain threats caused by the four-month war, which has severely disrupted shipping through the Strait of Hormuz. Trump’s comments, along with reports from Axios that US and Iranian negotiators had agreed on a text extending the ceasefire by 60 days and addressing Iran’s uranium stockpiles, sparked a wave of buying. Mining stocks also gained, and aluminium and zinc posted solid rises.
Gold Buckles Under Peace Hopes and Tighter Monetary Policy
Gold edged up 0.2% to around $4,220 an ounce in London but remained more than 2% down for the week. The precious metal, a traditional safe haven, has declined roughly 20% since the conflict started in late February, partly because a potential deal would lower the geopolitical risk bid. Brent crude oil prices sank over 4% to $86.47 a barrel on the news. Iran's semi-official Mehr news agency reported the tentative deal includes reopening the Strait of Hormuz and releasing $24 billion in frozen Iranian assets. However, Iran’s foreign ministry said no conclusion had been reached, urging caution.
Macro Implications for Crypto
The European Central Bank raised interest rates for the first time in nearly three years, citing war-driven inflation, while UBS pushed back its forecast for Fed rate cuts to 2027. Such hawkish signals have weighed on gold and other non-yielding assets. Lower oil prices and a credible peace agreement could alleviate some of that inflation pressure, potentially encouraging central banks to moderate tightening. For cryptocurrencies, this environment could prove supportive: cheaper energy reduces mining and transaction costs, while an improved macro backdrop often boosts risk appetite.
Yet analysts warn that markets have been burned by similar peace talk announcements before. Ole Hansen of Saxo Bank noted investors should focus on Iranian actions, not Trump’s statements. Julius Baer cut its 3-to-12-month gold target to $4,250, reflecting lower safe-haven demand. If the deal materializes, copper and risk assets may extend gains; if it collapses, metals could reverse, and cryptocurrencies might face renewed headwinds. For now, the tentative peace narrative has injected a dose of optimism across commodity and equity markets, with crypto traders watching closely for follow-through over the weekend.
