Key insights
- Mining stocks declined due to falling gold and copper prices driven by renewed US-Iran tensions. Concerns about inflation, potentially leading to sustained higher interest rates by the Federal Reserve, further pressured gold. While Chinese demand provides some support to copper, broader macroeconomic concerns and geopolitical risks create a bearish outlook for the sector, indirectly impacting US equities.
Investing.com -- London-listed mining stocks fell sharply on Friday, with the sector down between 3.5% and 7.4%, after renewed strains in U.S.-Iran relations triggered a broad selloff in precious metals and commodities.
As of 05:05 ET (09:05 GMT), Spot gold fell 2.6% to $4,566.75 an ounce, weighing heavily on major miners including Antofagasta, Anglo American, Rio Tinto, Endeavour Mining and BHP Group.
Antofagasta was among the biggest fallers on the FTSE 100, down 7.4%, while Anglo American lost 5.7%. Rio Tinto fell 3.5%, Endeavour Mining slipped 3.4% and BHP Group declined 3.8%.
The decline followed a deterioration in diplomatic sentiment after U.S. President Donald Trump rejected Tehran’s latest peace proposal and warned that any ceasefire agreement remained fragile, prompting investors to unwind earlier bets on a potential easing in tensions.
The pressure on gold also reflects broader macroeconomic concerns tied to the Middle East conflict.
Earlier this year, Iran’s closure of the Strait of Hormuz pushed crude oil prices above $100 a barrel, fuelling inflation fears and reinforcing expectations that the U.S. Federal Reserve will keep interest rates higher for longer.
Higher borrowing costs typically weigh on gold, which offers no yield and becomes less attractive relative to interest-bearing assets. Bullion has already fallen roughly 25% from its January peak despite a partial recovery in recent weeks.
Copper prices also weakened, although Chinese demand has remained relatively resilient this year, supported by consumption from clean energy and technology sectors that has helped offset weakness in property and construction activity.
Longer term, copper continues to draw support from expectations of rising demand linked to artificial intelligence infrastructure, power grid upgrades and the broader global energy transition.
Supply-side risks have also offered support, with China’s restrictions on sulfuric acid exports and disruptions to sulfur production in the Middle East potentially tightening global market conditions.