Commodity outlook đź•— Last Update: 10 March 2026, 8.30 PM
by Riteshkumar Sahu (riteshkumar.sahu@kotak.com), Saait Sawant Dessai
Precious Metals – Safe-Haven Demand Returns as Dollar Weakens
Gold and silver moved higher as the U.S. dollar softened and geopolitical tensions showed signs of easing. Spot gold rose nearly 1% to above $5,180 per ounce, while silver gained more than 2% to around $88.5. The rally followed comments from Donald Trump indicating that the Middle East conflict could move toward resolution, which reduced immediate panic in financial markets.
Earlier, the conflict with Iran had pushed energy prices sharply higher due to disruptions around the Strait of Hormuz, raising global inflation concerns and delaying expectations of U.S. Federal Reserve rate cuts. Typically, such conditions weigh on non-yielding assets like gold. However, bullion regained momentum as the dollar weakened and crude oil prices corrected sharply.
Despite short-term volatility and some ETF outflows, the broader outlook for precious metals remains constructive. Persistent geopolitical uncertainty, fragile macroeconomic conditions, and ongoing central-bank demand are likely to keep a strong underlying support for bullion prices in the near term.
Crude Oil – Sharp Correction on De-Escalation Signals
Crude oil witnessed a sharp decline after a period of extreme volatility, with WTI falling more than 6% to around $88.6 per barrel. The drop followed remarks from Donald Trump suggesting that the Iran conflict could soon end, which eased concerns about supply disruptions.
The White House also hinted at potential measures such as waiving oil-related sanctions and deploying the U.S. Navy to escort tankers through the Strait of Hormuz, a critical passage that carries nearly 20% of global oil shipments.
During the peak of the conflict, energy prices had surged sharply, with crude briefly approaching $120 per barrel as Gulf producers reduced output amid shipping disruptions. Although prices have now corrected, tanker traffic through Hormuz remains limited due to repeated vessel attacks.
Going forward, the crude market is likely to remain highly sensitive to geopolitical developments. Unless shipping routes normalize and supply flows stabilize, oil prices may continue to trade with elevated volatility and a geopolitical risk premium.
Base Metals – Copper Firm, Aluminium Pulls Back
Base metals are trading on a mixed trend, reflecting shifting geopolitical and supply dynamics. Copper remains relatively strong near $13,120 per tonne, supported by improving risk sentiment and steady buying interest in the industrial metals segment.
Aluminium, however, has retreated from its recent four-year highs following indications that the Middle East conflict could ease. Earlier concerns had focused on potential supply disruptions from the Persian Gulf, which accounts for roughly 9% of global aluminium production.
Despite the pullback, some tightness in the physical market remains visible. A surge in orders to withdraw aluminium from London Metal Exchange (LME) warehouses suggests continued demand in the spot market. However, the easing of the cash-to-three-month spread indicates that immediate supply fears have started to moderate.
Natural Gas – Prices Ease on Improved Supply Outlook
U.S. natural gas futures slipped below $3.09 per MMBtu, falling more than 1% and extending losses for a second consecutive session. Prices weakened after geopolitical concerns eased and the G-7 signaled readiness to release strategic reserves if necessary.
Although risks remain—including the temporary shutdown of the world’s largest LNG export hub and disruptions around the Strait of Hormuz—U.S. gas prices are relatively insulated due to ample domestic supply and limited export capacity growth.
Weather conditions are also influencing demand expectations. Forecasts of warmer-than-normal temperatures across much of the United States through late March are expected to reduce heating demand, keeping near-term price momentum subdued.
Chanakya Commodity Outlook
Overall commodity markets remain highly sensitive to geopolitical developments. Precious metals are benefiting from safe-haven demand and dollar weakness, while crude oil is correcting as diplomatic signals emerge. Industrial metals are mixed as supply concerns ease slightly, and natural gas remains under pressure due to comfortable supply and seasonal demand trends.
In the near term, volatility is likely to remain elevated across commodities, particularly energy markets, as investors closely track developments in the Middle East and global policy responses.
Bullion & Crude analysis by Kaynat Chainwala, AVP Commodity Research, Kotak Securities:
Spot gold climbed above $5,190/oz today, while silver gained about 3% to around $90/oz, as traders eye geopolitical developments following comments from Trump suggesting the Gulf conflict could end soon, which could ease inflation expectations, particularly after the recent sharp decline in oil prices. Yesterday, gold rebounded strongly from $5,010/oz, eventually settling near $5,140/oz, as easing concerns surrounding the conflict involving Iran weakened the U.S. dollar and supported bullion prices. Silver also posted solid gains, rising about 3% after recovering from an intraday low of $79.6 to close to $87/oz. The dollar had initially strengthened after WTI crude oil briefly surged toward $119 per barrel, a move seen as potentially inflationary and supportive of a more hawkish policy stance from the Federal Reserve. However, the sharp pullback in crude prices later in the session helped precious metals rebound from their earlier lows. Gold was also supported by continued central bank demand, with the People’s Bank of China extending its gold reserve purchases for a sixteenth consecutive month in February.
WTI crude oil fell to around $84.4 per barrel today as Trump indicated that the war with Iran may end “very soon,” easing fears of prolonged supply disruptions. He also signaled plans to waive oil-related sanctions and deploy the U.S. Navy to escort tankers through the Strait of Hormuz, while warning Iran with “death, fire, and fury” if it interferes with shipping in the key transit route. Oil markets have been highly volatile since tensions escalated in the U.S.–Israel confrontation with Iran on February 28, prompting several Gulf producers to reduce output following drone attacks. The United Arab Emirates, Kuwait, and Saudi Arabia joined Iraq this week in cutting production amid tanker traffic disruptions along the Strait of Hormuz, briefly pushing oil prices to $119.5 per barrel on Monday. Despite the sharp spike, prices later pared most of the gains and settled 5% higher at $94.8 per barrel, still the highest closing level since August 2022, after G7 finance ministers signaled their readiness to release strategic petroleum reserves if necessary, although they decided to hold off the release of oil from their respective strategic reserves, for now.
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