Energy markets remain extremely sensitive

CHANAKYA GLOBAL COMMODITY RADAR

Precious Metals Under Pressure as Dollar Strengthens

Gold prices hovered near $5,090 per ounce on Friday, trading moderately higher but still on track for a second straight weekly decline. Rising crude oil prices have revived inflation concerns, forcing markets to scale back expectations of near-term monetary easing by the US Federal Reserve. Silver also remained under pressure, slipping below $83 per ounce and extending losses for the third consecutive session. A stronger US dollar and intensifying geopolitical tensions in the Middle East continue to weigh on precious metals. While persistent geopolitical risk provides long-term support for bullion, elevated inflation expectations and dollar strength may cap near-term upside. Weak physical demand in India contrasts with continued central bank buying in China.

Crude Oil Pulls Back but Supply Risks Remain Elevated

WTI crude futures retreated slightly to trade below $95.50 per barrel after rallying nearly 5% earlier in the week. Energy markets remain dominated by escalating tensions between the US and Iran, with no clear signs of de-escalation. Ongoing military strikes across the Middle East and the effective closure of the strategic Strait of Hormuz have heightened fears of global supply disruptions. The US administration has attempted to stabilize markets by temporarily allowing countries to purchase Russian oil currently stranded at sea. In addition, US Treasury Secretary Scott Bessent proposed forming an international naval coalition to escort oil tankers through the Strait once conditions permit. Despite the International Energy Agency announcing a historic release of 400 million barrels from strategic reserves, markets remain structurally tight, keeping crude prices fundamentally supported in the near term.

Base Metals Slip Amid Dollar Strength and Energy Shock

Base metals traded broadly lower as the stronger US dollar and surging energy prices weighed on sentiment. Copper declined for the third straight session, hovering near $12,830 per ton. Aluminium, which recently surged to a four-year high on smelter shutdown risks, eased slightly to around $3,460 per ton. Zinc also softened to near $3,280 per ton, while lead slipped about 0.5%. Supply risks remain elevated as the closure of the Strait of Hormuz continues to disrupt regional logistics. Aluminium Bahrain BSC has declared force majeure, highlighting mounting supply challenges. Tight physical availability and rising premiums suggest that while prices may correct in the near term, the downside could remain limited.

Natural Gas Gains on LNG Supply Disruptions

US natural gas prices rose nearly 2% to trade around $3.2 per MMBtu, supported by tightening global energy supply. Escalating attacks involving Iran, GCC nations and US–Israeli forces forced QatarEnergy to halt LNG operations, which account for nearly 20% of global supply. UAE cargo shipments are also stalled due to security risks in the Strait of Hormuz. As a result, Asian and European buyers are increasingly turning toward US LNG supplies, boosting demand for Henry Hub gas. Although the US Energy Information Administration reported a smaller-than-expected inventory draw of 28 bcf, tightening global supply dynamics continue to support the near-term outlook for natural gas prices.

Global Commodity Outlook

Escalating geopolitical tensions in the Middle East, rising crude oil prices and a stronger US dollar are currently shaping global commodity trends. While precious metals may face short-term pressure from dollar strength, persistent geopolitical risk continues to support long-term safe-haven demand. Meanwhile, energy markets remain extremely sensitive to supply disruptions, keeping crude and natural gas structurally supported despite occasional price pullbacks.