Commodity outlook covering gold, crude, base metals and natural gas
🕗 Last Update: 19 February 2026, 7.30 PM
by Riteshkumar Sahu (riteshkumar.sahu@kotak.com), Saait Sawant Dessai
Gold Outlook — Safe-Haven Support Keeps Bias Firm
Gold continues to trade within a narrow consolidation band near the $5,000/oz mark after the previous session’s sharp rally, as thin Lunar New Year liquidity keeps volumes subdued across Asian markets. The recent upmove has been primarily driven by renewed safe-haven demand amid persistent geopolitical tensions, especially developments surrounding US-Iran negotiations, which have offered limited clarity and kept risk sentiment cautious.
From a macro perspective, bullion direction remains closely linked to Federal Reserve policy expectations. January FOMC minutes suggested policymakers favour holding rates steady for now, while markets have slightly scaled back aggressive rate-cut bets. Upcoming US GDP and PCE inflation data are expected to provide clearer guidance. In the near term, geopolitical uncertainty continues to offer downside protection, though sustained upside will depend on softer macro data and easing real yields.
Crude Oil — Geopolitical Premium Lifts Prices
WTI crude extended gains for a second straight session, crossing the $66 per barrel mark after posting its strongest rally since October. The primary catalyst remains rising geopolitical risk premium amid escalating US-Iran tensions and ongoing military developments in the Middle East, which have revived concerns about potential supply disruptions.
Additional support emerged from industry data showing a 0.61-million-barrel draw in US crude inventories, partially offsetting earlier stock builds. Markets now await confirmation from official EIA data. While diplomatic talks in Geneva continue, limited progress suggests that crude prices may remain highly headline-driven. Near-term volatility is likely to persist, with price direction influenced by geopolitical developments as well as global demand signals.
Base Metals — Consolidation Phase Emerging
Base metals traded with a softer undertone as aluminium, copper and zinc gave back part of their earlier gains. Copper retreated toward the $12,856/ton level, pressured by a stronger US dollar and slightly hawkish interpretation of recent Fed commentary. Rising exchange inventories and muted physical demand in China during the Lunar New Year period further weighed on sentiment.
After a strong speculative rally over the past two months, copper appears to be entering a consolidation phase. Markets continue to price in potential rate cuts later this year, but immediate upside may remain capped until clearer demand recovery emerges. Going forward, macro data releases, Fed policy signals and inventory trends will remain key drivers of price direction.
Natural Gas — Diverging Global Trends
US natural gas prices weakened toward four-month lows as near-record production levels and forecasts for warmer weather reduced heating demand expectations. Higher output has supported comfortable storage dynamics, creating a bearish near-term fundamental backdrop.
In contrast, European gas markets strengthened due to geopolitical concerns tied to potential LNG supply disruptions through the Strait of Hormuz — a route responsible for nearly 20% of global LNG trade. European storage levels remain tight at around 33%, well below seasonal averages, which continues to underpin prices despite stable pipeline flows. Overall, natural gas markets are likely to remain sensitive to geopolitical headlines and weather trends in the near term.
Spot Gold and silver rebounded to $4940/oz and $76/oz respectively after two consecutive sessions of losses as traders look forward to FOMC meeting minutes, US Core PCE number and speeches by several Fed officials for clues on US monetary policy. Recent FOMC commentary has been mixed as Fed Governor Michael Barr favors steady rates “for some time,” while Chicago Fed’s Austan Goolsbee sees cuts possible if inflation nears 2%. Yesterday, Gold closed below $4,880/oz, while silver closed at $73.50, both slipped to one-week lows weighed down by stronger dollar and improved geopolitical sentiment after Iran signaled a “general agreement” with the US on a potential nuclear deal. Looking ahead, Asian volumes remain muted across major markets due to ongoing Lunar New Year holidays (till Feb. 23), limiting liquidity and risking short-term swings in precious metals.
WTI Crude Oil fell to a two-week low of $61.9/bbl on Tuesday after Iran’s foreign minister said recent talks were constructive, with both sides reaching an understanding on the main “guiding principles” of a potential deal. Prices retreated from an intraday high of $64.1/bbl, which had been driven by supply disruption concerns after Iran temporarily closed the Strait of Hormuz, a key global oil transit route, during military drills. Meanwhile, the first day of trilateral talks aimed at ending the war in Ukraine concluded without a breakthrough; a second round of U.S.-mediated negotiations is scheduled in Geneva on Wednesday. Today, oil prices remain under pressure as progress in U.S.–Iran nuclear talks reduces the geopolitical risk premium, while traders stay cautious ahead of key U.S. economic data and lingering concerns about the AI outlook.
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