Commodities Overview: Oil Erases Early Gains, Gold Volatile After Israel Attack on Iran

Oil prices remained stable on Friday, after rising more than $3 a barrel on reports that Israel had attacked Iran, while gold prices headed for the country’s biggest weekly streak of gains. year, supported by a weaker dollar and purchases of safe haven assets. .

Benchmark contracts increased more than $3 before going back. Brent futures are rising +0.36% to $87.42 a barrel by 5:41 a.m. ET. The most active West Texas Intermediate contract rose +0.51% to $83.15.

“The fear is that we are on an increasingly intense path of retaliation… The hope is that retaliatory attacks will decrease in magnitude and then fade away,” Bjarne Schieldrop, commodities analyst at SEB Research, told Reuters.

Crude oil’s risk premium has received a fresh boost from tensions in the Middle East, said Ole Hansen, head of commodity strategy at Saxo Bank.

Iran, the third-largest producer in the Organization of the Petroleum Exporting Countries, produces about 3 million barrels of oil per day (bpd), or about 3% of total world production.

Meanwhile, spot gold prices also extended gains, set for a fifth straight week of gains, and up more than 2% this week. Prices (HAUUSD: CUR) hit an all-time high of $2,431.29 on Friday.

Ingots in brief broke $2,400 an ounce on reports of Israeli attacks before recouping gains. A weaker dollar (DXY) makes gold less expensive for buyers of other currencies, while the metal tends to benefit even in times of economic and geopolitical uncertainties.

Gold’s gains, however, came despite strong U.S. data, hawkish comments from Fed members and a stronger dollar, Saxo’s Hansen added.

A broad risk-off tone in markets has also contributed to gold’s safe-haven status.

Recent commodity price movements and a look at some ETFs