ING analysts said copper prices rose on Friday and are heading for their first weekly gain this month after US President Donald Trump extended the deadline for Iran to reach an agreement, boosting hopes for de-escalation and supporting risk appetite in markets.

However, the analysts noted that most industrial metals remain under pressure amid ongoing uncertainty surrounding US-Iran relations, in addition to the impact of the conflict that has continued for about a month, which is weighing on demand and global growth expectations.

Geopolitical tensions and growth concerns weigh on the market

The report stated that “copper rose on Friday and is on track for its first weekly gain this month after Trump extended the deadline for reaching an agreement with Iran, which supported hopes for de-escalation and improved growth sentiment.”

However, “most industrial metals have declined this month, as uncertainty surrounding negotiations between Washington and Tehran, along with the ongoing conflict, remains a key factor keeping risk appetite fragile.”

The analysts added that “escalating geopolitical tensions have raised concerns about inflation and increased worries about a slowdown in global industrial activity, putting pressure on demand expectations.”

Monthly losses despite recent improvement

In this context, copper prices have declined about 7% since the start of the month, reflecting a broader reassessment of growth-linked assets within the base metals market, amid an economic environment characterized by elevated risks and uncertainty.

Bitcoin fell below the $67,000 level, while Ethereum approached the $2,000 threshold, amid declining equities and oil prices rising above $100 per barrel, alongside large-scale liquidation of leveraged long positions, reflecting fragile investor sentiment.

The cryptocurrency market dropped to its lowest level in more than two weeks, with Bitcoin trading around $66,572, while Ethereum declined to near $2,000. The CoinDesk 20 Index also fell 2.2% since midnight UTC, reaching its lowest level since March 9.

This decline came alongside a drop in US equities, with Nasdaq 100 futures trading at 23,760 points, about 10% below their peak levels recorded in January this year.

War and oil pressures weigh on risk appetite

Risk aversion increased as oil prices rose and concerns grew that the war in Iran could last longer than expected, reinforcing inflationary pressures and weighing on high-risk assets such as cryptocurrencies.

Altcoins were the hardest hit, with ETHFI falling 6%, while WLD, WIF, SEI, and FET declined between 3.6% and 4.7%.

Large-scale liquidation of long positions

Long positions in futures markets suffered heavy losses, with approximately $300 million liquidated over the past 24 hours, compared to only $50 million in short positions.

This marks the fifth time in 10 days that long positions have faced such liquidations, reflecting earlier bets on price increases driven by the war that have not materialized.

Rising bearish bets

XRP fell more than 2.5% over the past 24 hours, while open interest in futures rose 2% to 1.95 billion units, the highest level since February 2, indicating an increase in short positions.

Bitcoin, Solana, Dogecoin, and BNB futures showed similar bearish signals.

Shiba Inu recorded the largest negative flows, reflecting heavy selling and risk reduction.

In contrast, CC, the token of the Canton Network, showed positive signals, with rising funding rates and increased open interest, indicating growing demand for long positions.

Low volatility despite the decline

Despite the price drop, 30-day implied volatility indicators for both Bitcoin and Ethereum continued to decline, suggesting that markets do not expect a sharp sell-off at the moment.

Bitcoin options worth more than $15 billion expired on Deribit, removing the influence of the $75,000 level as a price magnet and opening the door for further declines amid a deteriorating macroeconomic outlook.

Risk reversal data shows that Bitcoin and Ethereum put options are trading at a volatility premium of 6% to 8% over call options, reflecting continued demand for downside protection.

Oil prices rose about 3% on Friday, but are heading for their first weekly decline since February 9, after US President Donald Trump decided to extend the pause on attacks against Iranian energy facilities, despite continued investor caution over the prospects of a ceasefire in the month-long war.

Brent crude futures rose by $3, or 2.78%, to $111.01 per barrel as of 11:18 GMT, while US West Texas Intermediate crude gained $2.59, or 2.74%, to $97.07 per barrel.

Despite Brent surging 53% since February 27, the day before US and Israeli strikes on Iran began, it has declined by 1.1% this week. US crude has also fallen 1.3% on a weekly basis, although it remains up 45% since the start of the war.

Priyanka Sachdeva, an analyst at Phillip Nova, said that despite talk of de-escalation, oil is trading based on the duration of the war rather than headlines, adding that any direct damage to oil infrastructure or a prolonged conflict could quickly push markets to reprice higher.

While Trump extended the deadline for Iran to reopen the Strait of Hormuz or face the destruction of its energy infrastructure, the United States has also deployed thousands of troops to the Middle East and is considering the use of ground forces to seize Kharg Island, a strategic hub for Iranian oil exports.

An Iranian official told Reuters that the 15-point US proposal, delivered to Tehran via Pakistan, is “one-sided and unfair.”

Neil Crosby, an analyst at Sparta Commodities, said that talk of delaying US strikes on Iranian infrastructure faded quickly, as the market remains aware of the ongoing US military buildup, Iran’s hardening stance, and the potential for unexpected developments over the weekend when markets are closed.

The conflict has removed around 11 million barrels per day from global supply, with the International Energy Agency describing the crisis as worse than both oil shocks of the 1970s combined.

Giovanni Staunovo, an analyst at UBS, said that each day restrictions on flows through the Strait of Hormuz persist, more than 10 million barrels of oil are effectively removed from the market, further tightening supply.

Analysts at Macquarie Group noted that oil prices could decline quickly if the war begins to ease soon, but are likely to remain above pre-conflict levels. They added that prices could reach $200 per barrel if the war continues through the end of June.

The US dollar is on track to post its strongest monthly gains in nearly a year, supported by safe-haven demand as the war in the Middle East escalates and hopes for de-escalation fade.

Market movements have been driven by heightened tensions following another volatile week, especially after US President Donald Trump once again extended the deadline for targeting Iranian energy facilities, while Washington and Tehran offered conflicting accounts regarding diplomatic progress.

The US Department of Defense is also considering sending up to 10,000 additional troops to the region, according to The Wall Street Journal, further dampening investor optimism about a near-term end to the war.

Dollar benefits from safe-haven flows

Safe-haven inflows have supported the dollar, alongside rising expectations for US interest rate hikes this year. The dollar index traded near the 100 level, up about 2.4% since the start of March, on track for its best monthly performance since July 2025, when it gained 3.4%.

Yen under pressure and potential intervention test

The Japanese yen weakened toward the ¥160 per dollar level, a threshold traders view as a potential trigger for official intervention. The yen was last trading at ¥159.86 after touching ¥159.98 earlier.

Lee Hardman, a currency strategist at MUFG, said the market will test the authorities’ commitment, noting that officials have repeatedly signaled in recent weeks their readiness to take strong action, and that levels are now approaching a point that could prompt actual intervention.

The yen has also come under additional pressure from rising Japanese bond yields after the Bank of Japan released new estimates for the neutral interest rate, indicating policymakers’ willingness to raise rates to address inflation. Japan’s heavy reliance on energy imports also makes it more vulnerable to rising prices compared to other major economies.

Euro and sterling decline

The euro fell 0.1% to $1.152, while the British pound declined for the fourth consecutive session, down 0.2% to $1.331.

Carol Kong, a currency strategist at Commonwealth Bank of Australia, said the conflict does not appear likely to end soon, adding that the US dollar remains dominant as long as the conflict continues.

She added that if the conflict proves prolonged, oil prices are likely to continue rising, which would support the dollar at the expense of energy-importing currencies such as the yen and the euro.

Risk-sensitive currencies under pressure

The Australian dollar, which is sensitive to risk sentiment, fell to a two-month low before recovering to trade at $0.688, having lost about 2% since the start of the war, making it the second worst-performing currency after the Indian rupee, which declined around 3%.

Rising rate expectations and higher yields

Investors are now pricing in around a 70% probability of a quarter-point US rate hike this year, according to the CME FedWatch tool, marking a sharp shift from earlier expectations of more than 50 basis points in cuts before the outbreak of the war.

The Bank of England and the European Central Bank are also expected to tighten monetary policy, as part of a broader shift in interest rate expectations, which has pushed bond prices lower and yields to multi-year highs during the current month.

US Treasury yields rose slightly on Friday following a strong overnight jump, with the two-year yield at 3.9899%, while the benchmark 10-year yield increased by about one basis point to 4.4278%.