Commodity outlook 🕗 Last Update: 9 March 2026, 10.30 PM
by Riteshkumar Sahu (riteshkumar.sahu@kotak.com), Saait Sawant Dessai
Bullion: Volatility Persists Amid Dollar Strength and Geopolitical Risks
Bullion markets experienced heightened volatility as a stronger U.S. dollar initially weighed on prices. Spot gold briefly slipped toward $5,014 per ounce, reflecting reduced expectations for near-term Federal Reserve rate cuts. However, the decline proved temporary as safe-haven demand resurfaced amid escalating geopolitical tensions in the Middle East.
Gold later rebounded above $5,110 per ounce, supported by renewed demand for defensive assets as disruptions to energy infrastructure and shipping routes through the Strait of Hormuz intensified global uncertainty. Silver mirrored the broader volatility in precious metals, falling intraday to $79.6 before recovering toward $84 per ounce.
Beyond geopolitical factors, structural support for bullion remains intact due to sustained central-bank buying, particularly from the People’s Bank of China, which continues to accumulate gold reserves. Going forward, bullion markets will remain sensitive to movements in the U.S. dollar, energy prices, and Federal Reserve policy expectations.
Crude Oil: Supply Disruptions Drive Prices Above $100
Oil markets surged sharply as escalating Middle East tensions triggered severe supply disruptions. WTI crude rallied toward $119 per barrel after production cuts were announced by major regional producers including Kuwait, Iraq, and the UAE.
The disruptions stem from halted shipping through the Strait of Hormuz, a corridor that normally facilitates roughly 20% of global oil trade. Several producers have been forced to curtail output due to logistical bottlenecks and rapidly filling storage capacity. Iraq’s production from its key southern fields reportedly dropped by nearly 70%, while Kuwait Petroleum Corporation declared force majeure on shipments.
Further tightening of supply followed refinery disruptions and attacks on energy infrastructure across the Gulf region, including incidents in the UAE and Bahrain. Meanwhile, Qatar temporarily halted LNG production after strikes on critical energy facilities.
Despite the sharp rally, oil prices later eased toward $100 per barrel after comments from U.S. leadership suggesting that geopolitical tensions could ease if the Iran nuclear threat is neutralized. Additionally, G7 finance ministers and the International Energy Agency (IEA) are discussing a coordinated strategic reserve release to stabilize markets.
In the near term, oil prices will remain highly dependent on geopolitical developments, particularly the reopening of the Hormuz shipping corridor and the duration of regional production outages.
Base Metals: Mixed Trends as Dollar Strength Caps Gains
Base metals are currently trading on a mixed trajectory, with zinc emerging as the only gainer while most other metals are experiencing mild corrections.
Aluminium prices have eased slightly, declining around 0.5% to $3,431 per ton, though the metal remains supported after recently reaching its highest level in nearly four years. The rally has been driven primarily by supply disruptions linked to Middle East tensions, particularly the interruption of shipping through the Strait of Hormuz. The Gulf region accounts for approximately 9% of global aluminium supply, making logistics disruptions a significant risk factor.
Supply concerns intensified further as Qatalum in Qatar curtailed production, while Aluminium Bahrain declared force majeure on shipments, prompting global buyers to scramble for alternative supplies.
Meanwhile, copper has retreated to multi-week lows as a stronger U.S. dollar and surging energy prices above $100 per barrel have heightened concerns about persistent inflation and slower global economic growth. These macroeconomic pressures have dampened investor appetite for industrial metals.
Natural Gas: LNG Supply Risks Push Prices Higher
U.S. natural gas futures surged more than 5% to around $3.3 per MMBtu, marking a one-month high. The rally was fueled by rising concerns that escalating Middle East tensions could disrupt global LNG flows.
Markets are closely monitoring the risk of prolonged shipping interruptions through the Strait of Hormuz, which could tighten global LNG supply and redirect demand toward U.S. gas exports. Additional uncertainty surrounding the restart timeline of QatarEnergy’s Ras Laffan LNG facility has further intensified supply concerns.
If geopolitical risks persist, the U.S. natural gas market may experience stronger export-driven demand, potentially providing further support to prices in the near term.
Bullion & Crude analysis by Kaynat Chainwala, AVP Commodity Research, Kotak Securities:
COMEX Gold and Silver have extended losses from last week, currently trading below $5100/oz and $84/oz respectively, as the U.S. dollar acts as the primary safe-haven amid escalating tensions in West Asia. Markets are increasingly concerned that higher energy costs could reignite inflation, potentially limiting the Federal Reserve’s ability to cut interest rates aggressively. Liquidity stress and forced liquidations to meet margin calls during the broader market sell-off have also pressured bullion prices since tensions escalated sharply last week. If geopolitical tensions begin to ease, the current dollar strength may fade and forced liquidations could unwind, creating room for gold and silver to stage a rebound. However, the trajectory will depend on how the conflict evolves, as prolonged tensions could sustain volatility, keeping bullion traders on a wait-and-watch mode in the near term. Upcoming U.S. economic data, including CPI, Core PCE Price Index, Prelim GDP, and JOLTS Job Openings, could influence expectations for Federal Reserve policy, but broader market trends are likely to remain highly sensitive to geopolitical developments in West Asia.
WTI Crude Oil prices surged sharply, jumping 30% in a single session to $119.5 per barrel, following a 35% rally last week, as the U.S.–Israel conflict with Iran enters its 10th day with no clear signs of de-escalation. The spike comes as several Gulf nations reduce output following recent drone attacks, while shipping through the Strait of Hormuz has been suspended, forcing Persian Gulf producers to store stranded crude in onshore tanks. The United Arab Emirates and Kuwait have now joined earlier production cuts by Iraq due to limited storage capacity. Meanwhile, Saudi Arabia has shut down its largest refinery, and Qatar has halted operations at key LNG production facilities earlier. Altogether, this disruption could remove more than 4 million barrels per day (bpd) of crude oil from global supply, along with a significant amount of liquefied natural gas (LNG), driving prices higher. The unusually tight Brent–WTI spread, which slipped to $0.2 per barrel earlier today, the lowest since June 2022, reflects concerns over potential supply disruptions around the Strait of Hormuz, pushing global buyers to seek alternative supplies and boosting demand for U.S. barrels. The spread has since widened to around $3 per barrel, with WTI prices easing from peak levels and currently trading below $103/bbl.
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