Escalating hostilities between the U.S. and Iran pushed American crude oil prices past the $90 per barrel threshold for the first time since late July. Meanwhile, zinc prices reached their highest level in over four years, supported by ongoing signs of tightening supply that have fueled a multi-month rally. Gold continued its downward trajectory, pressured by rising oil prices which strengthened expectations for further interest rate hikes by the Federal Reserve.

Oil: WTI Surpasses $90 for First Time Since Late July as U.S.-Iran Tensions Intensify

U.S. crude prices broke through $90 a barrel for the first time since late July, driven by a new wave of U.S. strikes against Iran that raised concerns about prolonged disruption to energy shipments through the Strait of Hormuz. In response to the renewed conflict, WTI crude surged 5.2%. President Donald Trump stated the strikes were retaliation for Iran's attempts to lay mines in the strait and a prior attack on a U.S. military base in Jordan. Earlier, maritime security firm Marisks reported that two supertankers attempting to exit the Strait of Hormuz were struck by projectiles on Monday evening. As tensions escalated, traders closely monitored how much further the conflict might deteriorate. Iran's Islamic Revolutionary Guard Corps warned of "severe punishment" in response to U.S. actions. Trump, speaking to Fox News, cautioned that any Iranian retaliation would be met with even stronger military force, suggesting Iran could be "completely destroyed." The rising oil prices had a global impact, with higher energy costs stoking concerns over inflation and further rate increases, pushing global bond yields to their highest levels in nearly two decades on Tuesday. After a period of significant volatility, crude oil posted only modest gains in August but remains up over 55% year-to-date. WTI for October delivery rose 5.2% to settle at $90.22 a barrel, while Brent for November delivery gained 4.6% to close at $94.65 a barrel.

Base Metals: Zinc Hits Four-Year High on Supply Concerns

Zinc prices climbed to their highest point in over four years, with ongoing signs of tightening supply extending the metal's months-long rally. The metal, primarily used for steel galvanizing, rose as much as 2.8% to $3,990 per ton on the London Metal Exchange (LME) before paring some gains. Several factors have recently driven zinc prices higher, including limited supply from Iranian mines due to the Middle East conflict. By the close of trading, LME copper fell 0.1% to $14,274.50 per ton; LME aluminum rose 1.2% to $3,281 per ton; LME nickel declined 1.2% to $16,665 per ton; LME zinc added 1% to $3,923.50 per ton; LME tin slipped 1.1% to $54,633 per ton; and LME lead gained 0.7% to $1,919 per ton.

Precious Metals: Gold Extends Slide Amid Rising Yields

Gold continued its downward slide, pressured by higher yields resulting from a global bond selloff. The decline in gold began last Friday when Federal Reserve Chair Warsh reiterated his commitment to curbing inflation. This week, the renewed escalation of the Middle East conflict pushed oil prices higher, intensifying worries about persistently high inflation and further weighing on gold prices. On Tuesday, Fed Governor Barr stated that the central bank should be prepared to raise interest rates if inflation does not abate. As of 5 p.m. Eastern Time, spot gold fell 2.4% to $4,328.82 an ounce, while spot silver dropped 3.7% to $64.0804 an ounce.