Oil tumbles on Iran hopes, precious metals hit by stronger dollar

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Oil tumbles on Iran hopes, precious metals hit by stronger dollar

ECONOMY 02.02.2026

Oil tumbles on Iran hopes, precious metals hit by stronger dollar / Photo: © AFP

Oil prices tanked Monday on easing US-Iran tensions while precious metals swung wildly following last week's dollar-fuelled collapse sparked by Donald Trump's hawkish pick to lead the Federal Reserve.

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The retreat was also reflected in equity markets, with most regional indexes tracking a retreat on Wall Street and extending Friday's losses amid fresh concerns over the tech sector.

Both main crude contracts shed more than three percent in early Asian trade as the US president said he was hopeful of reaching a deal with Tehran after it warned that any attack on the Islamic republic would trigger a regional conflict.

Washington has hit out at the country's leadership in recent weeks over its deadly response to anti-government protests last month, with Trump threatening military action while ordering the dispatch of an aircraft carrier group to the Middle East.

He has also pushed for an agreement over Iran's nuclear programme.

Supreme leader Ayatollah Ali Khamenei on Sunday likened the recent protests to a "coup" and warned that a US attack would trigger a broad conflict.

"The Americans should know that if they start a war, this time it will be a regional war," he said.

Asked about the Iranian leader's warning, Trump told reporters on Sunday: "Of course he is going to say that.

"Hopefully we'll make a deal. If we don't make a deal, then we'll find out whether or not he was right," he said.

Oil's drop was helped by a stronger dollar, which came on the back of news that Trump had tapped Kevin Warsh to take the helm at the US central bank.

The president said Warsh, a former Morgan Stanley investment banker and Fed governor, "will go down as one of the GREAT Fed Chairmen, maybe the best".

Traders regard Warsh as the toughest inflation fighter among the final candidates, raising expectations of monetary policy that would underpin the greenback.

The choice also eased recent concerns about the Fed's independence following a series of attacks on incumbent Jerome Powell over his reticence to cut rates as quickly as the president wanted.

The dollar surged across the board on the news, having taken a battering for most of last week on concerns the White House was happy to see it weaken.

While Warsh is seen as more open to keeping rates higher, Stephen Innes at SPI Asset Management said: "People do not get handed the keys to the most powerful central bank on earth because they plan to drive in the opposite direction of the people who gave them the keys.

"The Fed may be independent, but personnel is policy, and this appointment was unlikely to have been made in a vacuum."

The announcement sent dollar-priced precious metals plunging Friday, with gold losing as much as 12 percent and silver more than 30 percent at one point.

And the losses mounted on Monday, with gold shedding as much as six percent to touch $4,586, while silver briefly lost around 11 percent to $75. Both bounced back slightly but were well down from their record highs of $5,595 and $121 touched last week.

The easing of Iran tensions added to the selling pressure on gold and silver, which are also considered go-to havens in times of turmoil and uncertainty.

Most equity markets were in the red following a sell-off on Wall Street that came amid fresh concerns over the wisdom of the vast sums being invested in artificial intelligence and when traders will begin to see returns.

Seoul, which has hit multiple records this year thanks to its big tech weighting, sank more than two percent, while Hong Kong, Shanghai, Sydney, Singapore, Taipei and Manila were also well down. Tokyo rose.

- Key figures at around 0230 GMT -

Tokyo - Nikkei 225: UP 0.2 percent at 53,422.01 (break)

Hong Kong - Hang Seng Index: DOWN 1.7 percent at 26,919.07

Shanghai - Composite: DOWN 0.8 percent at 4,083.84

Euro/dollar: UP at $1.1870 from $1.1856 on Friday

Pound/dollar: UP at $1.3693 from $1.3688

Dollar/yen: UP at 155.00 yen from 154.64 yen

Euro/pound: UP at 86.68 pence from 86.63 pence

West Texas Intermediate: DOWN 3.5 percent at $62.92 per barrel

Brent North Sea Crude: DOWN 3.3 percent at $67.02 per barrel

New York - Dow: DOWN 0.4 percent at 48,892.47 (close)

London - FTSE 100: UP 0.5 percent at 10,223.54 (close)

K.M.Thompson--TNT

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The National Times - Oil tumbles on Iran hopes, precious metals hit by stronger dollar