Commodity outlook 🕗 Last Update: 27 February 2026, 7.30 PM
by Riteshkumar Sahu (riteshkumar.sahu@kotak.com), Saait Sawant Dessai
🟡 Precious Metals Sector
Gold – Structurally Firm Amid Policy & Trade Uncertainty
Spot gold is holding near $5,180 per ounce, on track for a seventh consecutive monthly gain. The metal continues to draw support from persistent trade friction, geopolitical uncertainty and divided Fed commentary.
Although expectations of aggressive US rate cuts have moderated — with June cut probability easing to around 50% — policy ambiguity and inflation concerns are keeping gold well bid.
Revised US tariff structures and fragile US–Iran negotiations add to macro uncertainty, reinforcing gold’s role as a hedge against policy missteps.
Bias: Structurally positive. Dips likely to attract strategic accumulation.
Silver – Outperforming on Volatility
Silver is advancing toward $90, gaining nearly 2% and heading for a second weekly rise. Tariff volatility and macro risk are supporting industrial and investment demand.
However, silver’s higher beta nature makes it more sensitive to global growth signals.
Bias: Positive with higher volatility than gold.
🛢 Energy Sector
Crude Oil – Risk Premium Back in Play
WTI crude has climbed 2% to around $66.5, marking a second consecutive monthly gain. Geopolitical risk remains the dominant driver, particularly due to:
• US–Iran diplomatic uncertainty
• Significant US military deployment in the Middle East
• Strait of Hormuz risks (20% of global oil flows)
While diplomatic talks continue, market confidence remains fragile. OPEC+ meeting outcomes will be crucial in shaping supply expectations.
The interplay between geopolitical headlines and production decisions is keeping crude range-bound but highly sensitive to breakout triggers.
Bias: Range-bound with upward risk premium intact.
Natural Gas – Supply Heavy but Export Demand Supportive
US natural gas is holding above $2.80/MMBtu, despite weaker-than-expected storage withdrawals.
• Inventories stand at 2.018 tcf
• Production remains strong at 108.7 bcfd
• LNG feedgas flows steady at 18.7 bcfd
Strong supply and warmer weather forecasts cap upside, but firm LNG demand and export season tightening limit downside pressure.
Bias: Sideways with downside protected by export demand.
🔩 Base Metals Sector
Copper – Policy-Driven Rally, Demand Still Watchful
Copper has emerged as the top performer, rising above $13,470/ton and marking a second weekly gain.
The rally is driven by:
• China Politburo signaling fiscal stimulus
• Expectations of proactive policy support
• Accommodative monetary stance
However, physical demand remains soft post Lunar New Year, and inventories are rising:
• SHFE stocks at highest level since 2016
• LME stocks at multi-month highs
With prices near record territory, the next directional cue will depend on China’s “Two Sessions” announcements and real demand traction.
Bias: Positive but vulnerable to demand disappointment.
Overall Commodity Market View
Commodities are trading under the influence of:
• Geopolitical risk premium
• Trade policy recalibration
• Divided Fed outlook
• China stimulus expectations
Precious metals remain structurally supported.
Crude is headline-driven.
Base metals hinge on Chinese demand validation.
Natural gas balances supply strength with export resilience.
Bullion & Crude analysis by Kaynat Chainwala, AVP Commodity Research, Kotak Securities:
Spot gold closed with modest gains at $5,185/oz yesterday, while silver slipped 1% to $88.3/oz, amid easing geopolitical risk premiums and rising expectations that interest rates will remain on hold for longer. Despite dovish remarks from Stephen Miran projecting up to 100 basis points of easing this year, market pricing pushed expectations for the first rate cut toward July, reflecting a mixed commentary by Fed officials and a hawkish undertone in the January FOMC minutes. This week, Austan Goolsbee signaled that rate cuts remain possible if inflation moderates further, while Susan Collins emphasized labor market strength, supporting a higher-for-longer stance. Similarly, Thomas Barkin noted that policy is already well positioned, suggesting no immediate need for adjustment.
Bullion prices rebounded sharply from intraday lows of $5,130/oz for gold and $85.2/oz for silver, supported by concerns over U.S. trade protectionism as Trump reiterated his commitment to expanding tariffs, alongside lingering uncertainty around U.S.–Iran negotiations. Today, gold trades near $5,180/oz, while silver holds above $89.5/oz amid soft U.S. Treasury yields. Sustained gains would likely require clearer signals of imminent rate cuts or renewed geopolitical escalation, as a firm dollar continues to cap upside.
WTI crude oil recovered from earlier losses yesterday, closing just 0.3% lower at $65.20/bbl after Iran indicated that recent talks in Geneva showed progress, though key sticking points remain unresolved. Washington seeks a complete halt to Iran’s uranium enrichment, while Tehran remains unwilling to fully comply, though it is open to limiting high-level activity. Iran continues to assert its right to peaceful nuclear energy and demands sanction relief, ruling out concessions on its missile program or regional proxies. Oil initially fell more than 2% on the resumption of U.S.–Iran talks, combined with a 16-million-barrel rise in U.S. crude inventories and expectations that OPEC+ may increase output by 137,000 bpd in April, all adding to supply side concerns. Today, oil prices edged higher to $65.5/bbl, reflecting next week’s high-stakes meeting amid U.S. military buildup and staff reductions in the Middle East, keeping traders on edge.
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