Commodity Insights

Precious Metals: Gold & Silver Under Pressure on Fed Caution

Gold and silver came under sharp selling pressure as a cautious Fed stance on rate cuts triggered a reassessment of easing expectations. Spot gold slipped over 2% to around $4,850/oz, erasing part of its recent rebound, while silver corrected sharply by nearly 11% to $78. Fed Governor Lisa Cook’s comments highlighting persistent inflation risks and resistance to premature easing weighed heavily on sentiment. Additionally, Trump’s nomination of Kevin Warsh as Fed Chair, seen as a less dovish choice, further dampened hopes of aggressive rate cuts. Despite near-term volatility, geopolitical risks and policy uncertainty continue to offer underlying support to gold.

Energy: Crude Oil Reacts to Easing Middle East Tensions

WTI crude futures declined over 1.5% to around $64/barrel, snapping a two-day recovery as confirmation of US–Iran nuclear talks in Oman eased immediate supply disruption fears. Diplomatic engagement reduced the geopolitical risk premium, though uncertainty over the scope and durability of talks continues to cap downside confidence. Divergence between US and Iran on negotiation terms keeps risks elevated, meaning any breakdown or escalation could quickly revive upside pressure in crude prices.

Base Metals: Broad-Based Weakness on Demand Concerns

Base metals traded lower across the board, led by copper, zinc, and lead (down ~0.5%), while aluminium slipped around 1%. Copper fell below $13,000/ton amid signs of demand fatigue, especially in China. Rising LME inventories in Asia and higher refined copper output expectations from China are adding to supply-side pressure. With easing consumption and rising supply, near-term risks remain skewed to the downside, and any rebound is likely to face selling pressure.

Natural Gas: LNG Demand Provides Support

US natural gas futures held firm near $3.64/mmbtu after a strong prior-session rally. The move was driven by robust LNG feedgas demand, with flows to major US export terminals nearing record levels. While warmer weather forecasts may limit upside, tight balances from recent storage drawdowns and strong LNG demand keep the near-term bias positive.

Bullion and crude quote by Kaynat Chainwala, AVP Commodity Research, Kotak Securities: