Crude Oil Eases Despite Structural Supply Risks

Bullion Under Pressure Amid Hawkish Fed Stance

Gold is trading steady near $4,670/Oz after witnessing a sharp correction over the last two sessions and is heading for its steepest weekly fall in nearly six years. Silver has also weakened toward $72, marking its third consecutive weekly decline.

The decline in bullion is primarily driven by a macro shift — rising Treasury yields and a stronger US dollar, fueled by energy-led inflation, have reduced the attractiveness of non-yielding assets like gold.

ETF outflows and cross-asset liquidation have further intensified selling pressure. However, gold still remains up around 8% YTD, supported by earlier central bank buying and geopolitical tensions following the Iran conflict escalation.

Outlook:
With central banks maintaining a hawkish stance and delaying rate cuts, the opportunity cost of holding gold remains high. Near-term upside appears capped, though geopolitical risks may provide intermittent support.

Crude Oil Eases Despite Structural Supply Risks

WTI crude is holding above $95/bbl but is on track for its first weekly decline in five weeks, even as geopolitical tensions in West Asia remain elevated.

Disruptions around the Strait of Hormuz, missile activity by Iran, and shutdowns at key facilities like Kuwait’s Al Ahmadi refinery continue to highlight supply-side vulnerabilities. Brent crude has surged nearly 50% this month, indicating strong stress in global supply chains.

However, signals of restraint from global leaders have reduced fears of immediate escalation, limiting further upside momentum.

Outlook:
While the market remains structurally tight due to supply risks, absence of aggressive escalation is capping speculative premiums. Future direction will depend on whether disruptions translate into sustained outages.

Base Metals Show Mild Recovery but Weak Trend Persists

Base metals are witnessing a modest rebound, with copper trading near $12,137/ton and aluminium gaining close to 1% at $3,275/ton.

Despite this recovery, both metals remain down nearly 4% on a weekly basis, reflecting continued macro pressure and weak demand signals.

Easing geopolitical tensions have supported short-term sentiment, but elevated energy costs and slowing global growth continue to weigh on industrial demand, especially from China.

Outlook:
Copper is likely to remain under pressure due to rising inventories and demand concerns. Hawkish global monetary policy may further cap upside across the metals complex.

Natural Gas Declines as Supply Outlook Improves

US natural gas futures have declined to around $3.10/MMBtu, reversing earlier gains amid broader weakness in the energy complex.

Sentiment has softened due to expectations of increased supply, especially with potential easing of sanctions on Iranian oil. Additionally, easing geopolitical tensions have reduced risk premiums.

A 35 Bcf storage build signals weakening seasonal demand as winter fades, further pressuring prices.

Outlook:
The market is transitioning from tightness to balance, with downside risks emerging as demand softens and supply visibility improves.