Commodity wrap: Crude oil falls 12% over the week on optimism over Iran-US deal; gold rises marginally, silver declines

From cooling crude prices to a marginal rise in the “safe-haven” metal gold, here is everything that went down with commodities this week.

Crude oil

In the international market, Brent Crude oil futures for delivery in August closed 1.70% lower at $91.12 per barrel (bbl) on Friday, May 29.

Over the week, the Brent Crude oil contract (August delivery) has fallen 12%, amid rising hopes of an extension of the Iran-US ceasefire agreement. The futures contract hit a week’s high of $97.81 per bbl on Tuesday, May 26 and touched the week’s low of $89.93 bbl on Friday.

West Texas Index (WTI) crude oil futures for expiry in July ended 1.28% lower at $87.76 per bbl on May 29. Over the week, it has declined more than 9%.

On Friday, crude oil prices declined after US President Donald Trump, in a post on Truth Social, said he is in a meeting in the White House’s Situation Room to make “final determination” over the proposal to extend the earlier Iran-US truce for another 60 days.

“Iran must agree that they will never have a Nuclear Weapon or Bomb. The Hormuz Strait must be immediately open, no tolls, for unrestricted shipping traffic, in both directions. All water mines (bombs), if any, will be terminated (we have removed, through detonation, numerous such mines with our great underwater mine sweepers. Iran will complete the immediate removal and/or detonation of any mines that are left, which will not be many!” the post read.

Previously, on Thursday, senior US officials had said that the United States and Iran had reached a tentative memorandum of understanding (MoU) that would extend the current ceasefire by 60 days and pave the way for fresh negotiations on Tehran's nuclear programme. However, at the time, the proposed agreement was awaiting final approval from US President Donald Trump.

Gold

Globally, COMEX gold for August delivery advanced as much as 2.09% to hit an intraday high of $4,627.10 per ounce on Friday, compared to the previous closing price of $4,532.40 per ounce. Over the week, the contract grew marginally. However, on the MCX, gold futures (for August expiry) edged lower over the week.

The US personal consumption expenditures (PCE) price index data, published on Thursday, showed that the PCE price index rose 3.8% year-on-year (YoY) in April, which was in line with expectations. The ‌PCE price index rose 0.4% month-on-month, after rising up 0.7% in March.

According to the CME Group’s Fedwatch, investors are betting on the US Federal Reserve keeping the interest rates steady at the upcoming FOMC meeting.

Furthermore, hopes of a US-Iran deal also led to the rise in gold prices.

Silver

In the international market, COMEX silver futures contracts for expiry in July closed in the negative territory for the third consecutive week, declining marginally over the past five days.

Domestically, white metal futures also dropped, falling 2% this week on the MCX. They touched an intraday low of ₹2,63,900 per kilogram on Friday, May 29, reflecting a ₹5,637 or 2.1% decline from the closing price of ₹2,69,537 per kilogram in the previous session.