Copper joins gold in broad commodities sell-off. There’s a worrying reason behind it
Workers roll copper rods made from recycled copper at a metal smelting plant in Yuexi County, Central China’s Anhui Province, on Friday, July 11, 2025.
Feature China | Future Publishing | Getty Images
Metal prices fell sharply on Thursday as investors worried about the impact of rising oil prices due to the US-Iran war on the global economy.
Gold fell about 6 percent silver 8% were off. Like industrial metals, sales have gone beyond these two. copper And palladium came under pressure, falling 2% and 5.5% respectively.
As sales intensified on Thursday, gold and silver are declining, despite being considered safe havens since the start of the war in Iran. Rising oil prices have led to concerns that inflation will reignite and interest rates will remain high. Higher rates weaken the appeal of non-yielding gold.
stronger dollar As a result of higher rates, gold also gained weight as it made the metal cheaper.
“Inflation priced in to eliminate Fed rate cuts, rising interest rates around the world and rising real rates are putting pressure on gold,” said Peter Boockvar, CIO of One Point BFG Wealth Partners. USA 10-year Treasury yield It surpassed 4,300% at one point on Thursday.
@GC.1 v. @SI.1 since February 27, 2026.
Copper and palladium, meanwhile, remained relatively stable after falling at the start of the war.
But that changed as growth concerns began to weigh on these industrial metals.
Recession risk
Industrial metals are used in practical ways. Copper, for example, is found in everything from electronic devices to electrical wiring and plumbing systems. The decline in copper prices is normally viewed by the Street as a sign of slowing economic growth.
@HG.1 v. @PA.1 chart since February 27, 2026.
The general consensus on Wall Street was that the longer the war dragged on, the greater the risk that oil prices would remain high enough for consumers and businesses to change their spending habits. leads to recession.
This is the “demand destruction” phase of the energy shock that traders and investors are talking about.
“On the industrial metals side… people are now really worried about recession risks,” Boockvar said.
And slower growth combined with higher inflation creates a “stagflation” scenario. But while investors are starting to trade “stagflation”, others think the probability is extremely low.
Ed Yardeni, president of Yardeni Research, wrote in a note Tuesday that “oil shocks are less likely to trigger the persistent stagflation seen in the past, especially in the 1970s,” citing the economic consequences of the 1973 OPEC embargo. He noted that although Russia’s invasion of Ukraine in 2022 would lead to an oil shock and high inflation, it would not lead to a recession.
It’s a belief Fed Chairman Jay Powell repeated at a news conference Wednesday. “I reserve the term stagflation for much more serious conditions.”
While Boockvar thinks the war needs to end for industrial metal prices to stabilize, he said gold is likely to rebound as focus turns to countries’ rising debts and deficits, which gold generally performs well against as a “trade of adulteration” play. He added that these deficits could only get worse due to military spending in the war.
Even if stagflation is coming, gold is a play in this environment, Christian Mueller-Glissmann, head of asset allocation research at Goldman Sachs, wrote in a note on Thursday.
“If the stagflation shock persists, particularly if real yields are falling, we would expect Gold prices to be further supported by investor demand for real assets and currency diversification,” he wrote.
Markets change and headlines disappear, but the fundamental principles of creating long-term wealth remain the same. Join us for our third CNBC Pro LIVE, where investors of all backgrounds, from financial professionals to everyday individuals, come together to cut through the noise and gain actionable strategies for smarter, more disciplined investing. No matter where you start, you’ll leave with clearer thinking and stronger strategies. Enter your email Here to get discount code
