Commodity Insights

Commodity Markets: Safe-Haven Demand Lifts Bullion; Crude Remains Range-Bound

Gold continued its strong upward momentum on Tuesday, extending gains to trade near $5,080 per ounce, while silver outperformed sharply, surging close to the $111 level. The rally reflects intensifying safe-haven demand amid escalating geopolitical and policy uncertainty. Renewed tariff threats from President Trump against key trading partners such as Canada and South Korea, combined with concerns over a potential U.S. government shutdown, have weighed heavily on the US dollar, enhancing the appeal of dollar-denominated precious metals.

The current move in gold highlights a clear uncertainty premium, driven less by economic growth expectations and more by persistent trade tensions, geopolitical risks, and declining confidence in major currencies. With the Federal Reserve expected to keep interest rates unchanged and questions lingering over policy independence, the broader macro backdrop remains supportive. As long as policy risks and currency volatility persist, gold and silver are likely to stay well supported, with silver additionally benefiting from industrial demand.

Crude oil prices, however, remained under pressure. WTI slipped below $60.50 per barrel as the resumption of exports from Kazakhstan’s Tengiz field and full operations at the CPC terminal eased near-term supply concerns. This added pressure following recent declines. That said, the downside was partially cushioned by severe winter weather in the US, which temporarily shut in a notable portion of domestic production.

On the policy front, OPEC+ is widely expected to maintain its current output strategy at the upcoming meeting, keeping production steady for March. Ongoing geopolitical tensions in the Middle East and unresolved Russia–Ukraine negotiations continue to limit aggressive selling. Overall, crude prices remain caught between rising non-OPEC supply and supportive risk factors, pointing to a volatile but broadly range-bound market, highly sensitive to supply and geopolitical headlines.

Base metals traded mixed in the evening session. Nickel remained relatively steady, while the broader complex edged lower. Copper declined nearly 1% to around $13,100 per tonne, as near-term demand signals weakened. Although dollar softness offered some support, it was insufficient to offset slowing activity in China ahead of the Lunar New Year, a period typically marked by rising inventories and subdued buying. Profit-taking after recent record highs, along with tighter margin requirements and trading curbs on the SHFE, further weighed on sentiment.

US natural gas futures eased about 3%, retreating from multi-year highs above $7.4 per MMBtu, as profit-taking set in after a sharp weather-driven rally. Extreme cold conditions had earlier disrupted nearly a tenth of US production, particularly in Texas and Louisiana, while also boosting heating and power demand. LNG feedgas flows weakened amid infrastructure stress. Despite the pullback, the near-term bias remains firm, with price direction hinging on the duration of weather-related supply disruptions and recovery timelines.

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