- Oil prices surged as Trump invoked the Defense Production Act to boost U.S. energy.
- Gold, silver, copper and platinum fell amid inflation and interest rate concerns.
- Rising oil prices pressure Bitcoin by increasing inflation risks and tightening financial conditions.
Oil prices rose to their highest levels after U.S. President Donald Trump invoked the Defense Production Act to support domestic oil production and refining. Meanwhile, gold, silver, copper and platinum prices fell.
Brent crude rose 4% to $113.17 per barrel, while U.S. West Texas Intermediate (WTI) gained 2.39% to $99.47. Oil prices climbed because of concerns about supply disruptions linked to the conflict involving Iran and Ukrainian attacks on Russian refineries.
In contrast, gold fell 2.16% to $4,060.40 per ounce, silver dropped 4.68% to $55.01, copper declined 2.76% to $6.398 per pound, and platinum lost 3.61% to $1,576.90.
Why Trump Invoked the Defense Production Act
On October 22, Trump declared oil production, refining, pipelines, and fuel storage essential to U.S. national security.
The move allows the government to support oil-related projects financially and encourage companies to expand production and storage. Trump cited funding problems, delays in permits, infrastructure limitations, and supply-chain issues as obstacles to increasing U.S. energy production.
However, the administration has not announced specific projects that will receive support. Any increase in oil supply will also take time. Oil prices remain high because of disruptions to global energy shipments linked to the Iran conflict and attacks on Russian refineries.
Why Gold and Silver Prices Are Falling
Gold and silver are usually seen as safe investments during times of uncertainty. However, rising oil prices also hurt these metals.
When oil becomes more expensive, transportation, manufacturing, and other business costs increase. This can push inflation higher and make it harder for the U.S. Federal Reserve to cut interest rates.
Higher interest rates and Treasury yields make gold less attractive because gold does not pay interest. A stronger U.S. dollar also puts pressure on gold and silver prices.
Silver faces an additional risk because it is widely used in industry. If high energy costs slow manufacturing and economic activity, demand for silver could weaken.
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Why Copper and Platinum Are Also Falling
Copper and platinum prices also declined because investors are concerned about rising costs and weaker economic growth. Higher energy prices make it more expensive to mine, process, and transport metals. They also hurt manufacturers and reduce demand for industrial materials.
However, copper still has long-term growth opportunities because of demand from electric vehicles, electricity infrastructure, and data centers.
The recent declines reflect near-term economic concerns rather than a loss of long-term demand.
What This Could Mean for Bitcoin
Rising oil prices also put pressure on Bitcoin and other risky investments. CryptoQuant analyst Darkfost warned that oil prices above $100 per barrel could create a difficult economic environment for Bitcoin.
Expensive energy keeps inflation high, increases the risk of an economic slowdown, and makes financial conditions tighter.
According to Darkfost, periods when oil prices have stayed above their annual average have often coincided with slower gains in Bitcoin prices. Falling oil prices, on the other hand, have sometimes coincided with Bitcoin recoveries.
In Sum
Oil is rising because of concerns about supply disruptions, while gold, silver, copper and platinum are falling amid worries about inflation, interest rates and economic growth.
Trump’s decision could help expand U.S. oil production over time, but it will not immediately solve global supply problems. Markets will continue to react to geopolitical tensions, oil availability and expectations for U.S. interest rates.
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Related: Bitcoin Drops Below $81,000 as AI Sell-Off and Oil Fears Hit Crypto Markets
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