Aluminum prices rose to their highest level in more than a month on Monday, after US and Israeli strikes on Iran raised concerns about an escalation in the Middle East — one of the world’s key producing regions for the metal.

The benchmark aluminum contract on the London Metal Exchange gained 3.1% to $3,236 per metric ton by 10:50 GMT, after touching $3,254, its highest level since January 29.

Investors are closely monitoring developments around shipping activity through the Strait of Hormuz, a vital trade route for commodities that has faced disruptions following Iranian attacks on US military bases in the region.

Neil Welsh of Britannia Global Markets said base metals broadly moved higher in morning trading, with aluminum leading gains amid fears that critical supply routes for Middle Eastern producers could be disrupted by the conflict in a region that accounts for a significant share of global output.

He added that the region represents around 9% of global aluminum production capacity, noting that prices tend to react sensitively to rising regional tensions.

According to data from the International Aluminium Institute, global primary aluminum output reached about 75 million tons last year. Most aluminum produced in the Middle East is exported to the US and Europe.

Citi analysts noted that the UAE is the largest aluminum producer in the region, and that nearly all shipments — except for exports from Sohar Aluminium in Oman — pass through the Strait of Hormuz.

Meanwhile, Panmure Liberum commodities analyst Tom Price warned that a prolonged conflict in the Middle East could push oil prices significantly higher, potentially weighing on global economic growth and weakening industrial demand.

In other metals markets, copper rose 0.2% to $13,370 per ton, zinc climbed 1% to $3,351, and lead gained 0.6% to $1,974, while tin fell 1.1% to $57,105 and nickel declined 1.1% to $17,645 per ton.

Bitcoin, the world’s largest cryptocurrency, declined by 0.3% during the day to trade near the $66,666 level, while Asian equity indices fell and oil prices surged amid broader macroeconomic uncertainty.

Over the weekend, Bitcoin traded within a range between $63,000 and $66,000. Analysts highlighted the market’s resilience, noting that the 24/7 nature of crypto trading allows investors to manage risk quickly while traditional markets are closed. Dominic John of Kronos Research said cryptocurrencies recovered their footing rapidly after the limited pullback. Jeff Ko, senior analyst at CoinEx, added that Bitcoin held the $66,000 level despite selling pressure in Asian equities, suggesting the market viewed the recent volatility as temporary rather than the beginning of a prolonged decline.

Macro pressures: equities and oil

Traditional markets opened the week on the back foot. Japan’s Nikkei 225 fell around 2.5%, while the broader TOPIX index dropped nearly 3%. Hong Kong’s Hang Seng and Singapore’s Straits Times Index also declined by roughly 2%.

Meanwhile, Brent crude rose more than 8.38% to $78.9 per barrel, while gold gained 2.05% to $5,386.

Rick Maida of Presto Research described oil as a key transmission channel through which macroeconomic shocks reach the crypto market. He explained that if oil stabilizes above $90 per barrel, inflation expectations could rise further, strengthening the US dollar and tightening liquidity, which would make cryptocurrencies more vulnerable to volatility.

Even so, the market avoided a wave of forced liquidations or any instability in stablecoins, while the continued operation of futures platforms such as Hyperliquid helped absorb the shock in real time.

Traders continue to monitor oil prices, US Treasury yields, and inflation indicators to assess whether the spike in volatility is temporary or the start of a longer liquidity tightening cycle.

Crypto market resilience

Analysts at QCP Capital noted that digital asset pricing quickly returned to prior levels. During the volatility, algorithms liquidated roughly $300 million in long positions, a figure considered moderate compared with the broad deleveraging seen in early February.

The relatively limited liquidations suggest traders had already reduced risk exposure in advance. At the same time, Bitcoin’s role as a “weekend hedge” is gradually being challenged by tokenized gold, which also trades around the clock and tends to attract capital during periods of uncertainty.

Derivatives data also point to market stability, with implied volatility briefly rising to 93%, still below readings seen last week at similar price levels.

QCP analysts noted similarities with last June’s scenario, when Bitcoin dropped below $100,000 during a weekend before rebounding on Monday and later reaching a record high near $123,000 weeks later.

Bets on large capital inflows

Despite the limited pullback, large investors continue to position for long-term upside. On February 28, sizable call option purchases expiring in March were recorded, including:

1,000 contracts with a strike price of $74,000

4,000 contracts with a strike price of $75,000 (expiring March 27)

These trades reflect expectations of a spring recovery following five months of declines.

Despite some constructive signals, QCP experts urged caution, emphasizing that price direction will remain closely tied to geopolitical developments and the broader macro environment.

A potential buying signal?

Data suggest that most investors who bought Bitcoin over the past two years are currently holding unrealized losses. Analyst Crypto Dan believes any further decline could present an attractive entry opportunity.

He argued that “contrarian logic” often works in markets, with major crashes typically occurring when most investors sit on large profits, while strong rallies tend to begin when the majority are under pressure.

In his view, a drop below $60,000 would increase the share of losing positions so that most market participants — excluding long-term holders — would be at a loss, potentially creating an ideal accumulation phase.

He also stressed that the lack of a clear strategy often leads to hesitation when opening or closing trades, advising investors to define clear trading rules in advance during current conditions.

On March 1, analyst CryptoTalisman said the largest cryptocurrency had fully recovered from its earlier pullback driven by geopolitical tensions and macroeconomic pressures.

Crude oil prices surged by more than 7% on Monday as traders grew increasingly concerned that the conflict between the United States and Iran could spiral out of control, potentially causing major disruptions to global supply.

US crude rose 7.4%, or about $5, to reach $72.02 per barrel by 6:09 a.m. Eastern Time. Global benchmark Brent crude also climbed about 5%, or $5.46, to $78.37 per barrel.

The sharp move followed a broad wave of airstrikes carried out by the United States and Israel against Iran, which reportedly resulted in the death of Supreme Leader Ayatollah Ali Khamenei along with several senior officials in the Islamic Republic.

It remains unclear who will lead the fourth-largest oil producer in OPEC. Ultimately, the oil market’s reaction will depend on whether the war results in a prolonged disruption to shipping through the Strait of Hormuz, the world’s most critical chokepoint for seaborne oil trade.

Analysts at UBS, led by Giovanni Staunovo, said in a client note on Sunday: “We view the pace of shipping resumption through Hormuz and the scale of Iran’s response as key factors in determining oil price direction in the coming days.”

US President Donald Trump said Sunday that military operations would continue until all US objectives were achieved. However, Trump also indicated earlier that Iran was willing to negotiate and that he had agreed, leaving the door open to possible de-escalation and avoidance of a long-term supply disruption.

Speaking to The Atlantic on Sunday, Trump said: “They want to talk, and I agreed to talk, so I will hold talks with them.” He also told CNBC that US military operations in Iran were “ahead of schedule.”

Meanwhile, oil tanker traffic through the strait has effectively halted as shipping companies took precautionary measures, according to consultancy Rystad Energy.

Matt Smith, oil analyst at Kpler, said: “Tankers are starting to pile up near the Strait of Hormuz, but nothing appears to be moving right now — there is clear panic among tanker operators.”

According to Kpler data, more than 14 million barrels per day passed through the strait on average in 2025, representing roughly one-third of global seaborne crude exports. About three-quarters of that volume heads to China, India, Japan, and South Korea.

Barclays analysts said in a client note on Saturday that Brent crude could climb to $100 per barrel if the security situation in the Middle East deteriorates further. UBS analysts added that severe disruptions could push spot Brent prices above $120 per barrel.

Amritpal Singh, Barclays analyst, said: “It is highly uncertain how this situation will end, but for now oil markets will have to confront their worst fears. It is difficult to overstate the potential impact on oil markets.”

Andy Lipow, president of Lipow Oil Associates, also warned that Iranian oil exports could collapse amid uncertainty over leadership succession in Tehran, as well as risks of domestic unrest and labor strikes in production areas and oil ports. Iran currently produces around 3.3 million barrels per day.

The British pound fell to its lowest level in two and a half months against the US dollar on Monday, while also slipping slightly against the euro, as investors moved toward safe-haven assets amid escalating tensions with Iran and continued uncertainty over the Bank of England’s monetary policy outlook.

The dollar strengthened on rising safe-haven demand driven by geopolitical tensions, in addition to higher oil prices.

Sterling declined 0.68% to $1.3393, after touching $1.3315 — its lowest level since December 17.

In addition to developments in the Middle East, the pound is also facing domestic political pressure following local elections in northern England that dealt a significant blow to the Labour Party led by Prime Minister Keir Starmer, fueling speculation that the government may shift toward more left-leaning policies and higher public spending.

Barclays analysts said that the growing influence of the moderate left wing within the Labour Party could justify expectations of increased fiscal spending and a higher risk premium on the British pound.

The bank noted that this premium has reached around 2% at the 0.88 level in the euro/sterling cross, with room for further widening in the near term depending on political developments.

The euro rose 0.05% to 87.68 pence against the pound.

George Vessey, Lead FX and Macro Strategist at Convera, said: “At the moment, price action in sterling and UK government bonds reflects caution rather than outright stress. However, with rising political uncertainty and limited policy clarity, sterling’s ability to recover appears constrained until Labour provides a clearer direction.”

Analysts also noted that short-term UK government bond yields near their lowest levels in several years align with broader economic data trends and a shift toward a more accommodative monetary policy stance from the Bank of England, reinforcing expectations for continued weakness in the pound.

The yield on two-year UK government bonds rose 4 basis points to 3.55% on Monday after hitting 3.516% last week — its lowest level since August 2024.

Meanwhile, German two-year bond yields moved higher as inflation-related concerns intensified.