Copper prices approached the $14,000-per-ton mark, while aluminum climbed to its highest level in more than four years, supported by ongoing tensions in the Middle East and growing optimism about the strength of global demand.

Base metals have started June on a strong footing, driven by expectations of tighter global supplies. Aluminum supply is facing increasing pressure as the United States struggles to reach a resolution to the conflict with Iran, while copper traders are bracing for a potentially decisive tariff decision from US President Donald Trump's administration.

Prices are also benefiting from growing bets on artificial intelligence-related assets and the energy transition. Tin, which is used in electronics soldering, jumped as much as 3.7% to $58,750 per ton, approaching record highs.

HSBC analysts said in a research note: “Metal prices are generally experiencing a rally driven by supply disruptions for some commodities due to the conflict in the Middle East, alongside strong structural demand.”

They added that commodity markets are facing what they described as “extreme supply pressure” as the Strait of Hormuz remains closed.

Optimistic forecasts from financial institutions

The gains followed a series of bullish forecasts from major financial institutions.

Goldman Sachs raised its year-end copper price forecast by more than 10% in a note issued earlier this week.

Meanwhile, Citigroup said last month that the aluminum market is experiencing the most favorable supply-demand conditions in at least half a century.

In another sign of tightening market conditions, spot aluminum contracts traded at a premium of $116.50 per ton over three-month futures on June 2, the largest premium since 2007.

Middle East conflict keeps markets on edge

Investors continue to closely monitor developments in the Middle East.

President Donald Trump remains optimistic that the United States could soon reach a temporary peace agreement with Iran, despite Tehran's threat to suspend negotiations due to escalating Israeli attacks in Lebanon.

The ongoing conflict is adding further uncertainty to future aluminum supplies from the region, which accounted for roughly 10% of global production before the war began.

Some copper production could also face disruptions if restrictions on sulfuric acid flows from the Middle East persist, as the material is a key input in copper production.

Price performance

As of 12:17 p.m. London time:

Aluminum rose 1.3% to $3,765 per ton, bringing its gains since the start of the year to more than 25%.

Copper advanced 0.9% to $13,962 per ton, moving closer to the $14,000-per-ton level.

Bitcoin (BTC) fell below the $70,000 level on Tuesday for the first time in two months, as sellers continued to dominate the market.

Data from TradingView showed Bitcoin dropping to an intraday low of $69,631 on the Bitstamp exchange.

After failing to keep pace with gains in equity markets, Bitcoin widened its performance gap versus other risk assets, declining around 2% on the day.

The drop inflicted significant losses on bullish traders, with total liquidations across Bitcoin and altcoin positions approaching $800 million over the past 24 hours, according to CoinGlass data.

The cryptocurrency has lost roughly 4% over the past 24 hours and remains more than 44% below its all-time high above $126,000, reached in late 2025.

US President Donald Trump said on Monday that talks with Iran remain ongoing despite reports suggesting Tehran had suspended indirect negotiations with Washington aimed at ending hostilities, a development that contributed to a modest decline in oil prices.

Investors continue to treat any signs of progress toward ending the US-Israeli conflict with Iran cautiously, given the fragile ceasefire agreement reached between Washington and Tehran in early April.

Likewise, Lebanon’s announcement on Monday of a limited ceasefire between Iran-backed Hezbollah and Israel failed to provide meaningful momentum to financial markets.

Markets focus on US economic data

Later today, the US Department of Labor is scheduled to release job openings data ahead of Friday’s closely watched monthly employment report, as markets continue to price in the possibility that the Federal Reserve’s next move could be a rate hike.

Economists surveyed by Reuters expect Friday’s report to show that the US economy added 85,000 jobs in May, while the unemployment rate is projected to remain unchanged at 4.3%.

Mounting pressures push prices lower

The sharp correction has been driven by a combination of factors, including fresh on-chain supply pressure, symbolic selling activity by major corporate holders, and continued macroeconomic headwinds.

Together, these factors have rapidly eroded investor confidence, turning what initially appeared to be a consolidation phase into a decisive break below key support levels.

This triggered an accelerated wave of forced liquidations, with more than $767 million wiped out from leveraged positions over the past 24 hours. Stop-loss orders were also activated across the market, intensifying selling pressure throughout the cryptocurrency sector.

What is behind the decline?

Bitcoin’s latest drop below $70,000 was driven by fresh supply concerns stemming from wallet transfers linked to Mt. Gox, along with a symbolic sale by Strategy Inc. involving 32 Bitcoin.

These developments revived fears of additional supply entering the market and dealt a blow to the long-standing “never sell Bitcoin” narrative that had enjoyed strong support among corporations and institutional investors, further fueling bearish sentiment and accelerating downside momentum.

Strategy records its first Bitcoin sale since 2022

Strategy Inc. disclosed that it sold 32 Bitcoin between May 26 and May 31 for approximately $2.5 million, at an average price of about $77,135 per coin, according to a filing submitted to the US Securities and Exchange Commission (SEC) on June 1.

The company said the proceeds were used to fund preferred stock dividend payments.

Although Strategy still holds more than 843,000 Bitcoin, the transaction — small in size but significant in symbolism — challenged the narrative long promoted by its former CEO and prominent Bitcoin advocate, Michael Saylor, that the company would “never sell Bitcoin.”

The news added to negative market sentiment and coincided with widespread unwinding of leveraged positions, increasing pressure on prices and contributing to Bitcoin’s continued decline.

Oil prices declined on Tuesday, giving back part of the strong gains recorded in the previous session, as Iran reviewed a proposed US agreement aimed at ending the conflict between the two countries, according to Iran’s Mehr News Agency.

Brent crude futures fell by $1.13, or 1.2%, to $93.85 per barrel by 11:30 GMT, while US West Texas Intermediate crude dropped $1.09, or 1.2%, to $91.07 per barrel.

Both benchmarks had surged more than 5% on Monday after posting losses exceeding 16% during May, driven by market optimism over the possibility of a peace agreement.

US President Donald Trump said on Monday that negotiations with Iran remain ongoing and expressed confidence that an agreement could be reached next week to extend the ceasefire and reopen the Strait of Hormuz.

A source cited by Mehr News Agency said that Iran has not yet responded to the final draft of the proposed temporary agreement.

Focus shifts to the Strait of Hormuz and oil inventories

Despite developments in the negotiations, Giovanni Staunovo, an analyst at UBS, noted that oil flows through the Strait of Hormuz remain constrained due to the ongoing conflict in the region.

Separately, the head of the oil industry and markets division at the International Energy Agency warned on Tuesday that global oil inventories could fall to critically low or historically tight levels ahead of peak summer demand if current stock drawdowns continue.

An executive at the Abu Dhabi National Oil Company also suggested that August could mark a turning point toward higher oil prices if demand recovers while supply disruptions linked to the conflict with Iran persist.

Tim Waterer, Chief Market Analyst at KCM Trade, said that the market is currently focused on whether negotiations between Washington and Tehran produce tangible progress or setbacks, as well as on the tone of statements issued by both sides, particularly Iranian threats regarding the Strait of Hormuz and actual tanker traffic through the waterway.

He added that the direction of negotiations will determine whether the current geopolitical risk premium remains embedded in oil prices or begins to fade.

Major disruption to global energy flows

Since the outbreak of the conflict, Iran has effectively imposed restrictions on most non-Iranian shipping entering and leaving the Gulf, disrupting roughly one-fifth of global oil and liquefied natural gas flows and driving prices more than 50% higher.

At the same time, the United States continues to maintain a blockade on Iranian ports.

Lebanon announced a partial ceasefire between Hezbollah and Israel on Monday, representing a limited de-escalation within the broader conflict that helped ignite the wider war involving Iran.

US inventories expected to decline

According to a preliminary Reuters survey, US crude oil inventories are expected to have fallen by approximately 3.6 million barrels in the week ending May 29, extending the decline recorded in the previous week.

Gasoline and distillate inventories are also expected to have decreased.

Fresh escalation in Ukraine

In a separate development, Russia launched large-scale attacks on Ukrainian cities early Tuesday using hundreds of drones and dozens of missiles. Ukrainian authorities said the strikes killed 18 people and injured more than 100 others.

The US dollar traded within a narrow range on Tuesday as investors monitored any signs of progress toward an agreement to reopen the Strait of Hormuz, while also awaiting key US economic data later in the day that could help shape expectations for Federal Reserve monetary policy.

A peace agreement between the United States and Iran would ease pressure on oil-importing economies such as Japan and the eurozone, while also reducing demand for the US dollar as a safe-haven asset.

US President Donald Trump said on Monday that talks with Iran remain ongoing, despite reports that Tehran had suspended indirect negotiations with Washington aimed at ending hostilities. The reports contributed to a modest decline in oil prices.

Investors remain cautious about any news suggesting progress toward ending the US-Israeli conflict with Iran, given the fragile nature of the ceasefire agreement reached between Washington and Tehran in early April.

Meanwhile, Lebanon’s announcement on Monday of a limited ceasefire between Hezbollah and Israel failed to provide a meaningful boost to market sentiment.

The US Dollar Index, which measures the greenback against a basket of six major currencies, slipped 0.05% to 99.05. The index has traded within a relatively tight range of approximately 98.9 to 99.5 since May 15.

According to Michael Pfister, markets regained some relief by Monday evening as it appeared the US president had successfully helped secure another ceasefire in Lebanon.

He added that foreign exchange markets are likely to remain highly sensitive to geopolitical headlines throughout the day, while any setbacks in negotiations will be viewed with considerable caution.

The dollar initially benefited from the conflict with Iran, which began on February 28, supported by safe-haven demand and the US economy’s relatively limited exposure to inflation caused by higher energy prices.

However, the currency has since surrendered part of those gains amid uncertainty surrounding the future course of the conflict.

Focus shifts to US data

Later today, the US Department of Labor will release job openings data ahead of Friday’s closely watched monthly employment report, as markets continue to bet that the Federal Reserve’s next move will be a rate hike.

Paul Mackel said that a combination of loose financial conditions in the United States, fading safe-haven support for the dollar, and the Fed’s cautious tone has kept the currency contained.

He added that a turning point may be approaching, with markets increasingly focused on incoming economic data and future guidance from central banks, particularly the Federal Reserve.

Mackel also highlighted the Federal Reserve policy meeting scheduled in two weeks.

Economists surveyed by Reuters expect Friday’s employment report to show that the US economy added 85,000 jobs in May, while the unemployment rate is projected to remain unchanged at 4.3%.

The 160 yen level remains in focus

In Japan, Finance Minister Satsuki Katayama said on Tuesday that authorities stand ready to intervene in currency markets if necessary, although she declined to comment on recent exchange-rate movements.

The Japanese yen weakened slightly to ¥159.72 per dollar, moving closer to the ¥160 level that markets widely regard as a potential trigger for official intervention.

Masafumi Yamamoto said that if USD/JPY breaks above 160, the risk of surpassing the April 30 high would increase significantly, raising the likelihood of stronger verbal warnings, fresh rate checks, or direct market intervention.

Investors are also awaiting remarks from Kazuo Ueda on Wednesday for clues on whether the central bank intends to proceed with a rate increase next week.

Derek Halpenny noted that policy action remains likely and that, even with softer inflation, the risk of falling behind economic developments continues to grow.

Markets still lean toward higher US rates

Despite recent developments, investors remain largely convinced that the Federal Reserve’s next move is likely to be a rate increase.

According to Fed Funds futures, a 25-basis-point rate hike remains fully priced in by March 2027, while markets currently assign roughly a 60% probability to such a move by December.

With geopolitical uncertainty still elevated, market participants appear reluctant to abandon expectations for tighter monetary policy.

Even if geopolitical tensions ease further, inflation is expected to remain elevated for longer. Oil prices continue to trade well above year-ago levels, while a 6% increase in the US Producer Price Index (PPI) during April points to the risk of persistent consumer inflation in the months ahead.

During today’s session, dollar traders are expected to focus on the April JOLTS job openings report ahead of Friday’s Nonfarm Payrolls release, as they assess whether continued labor market strength could allow the Federal Reserve to raise interest rates sooner than currently expected.