Commodity Markets Under the Influence of Geopolitical Tensions and Global Economic Changes

Commodity markets are experiencing mixed movements driven by geopolitical tensions and economic developments,
raising questions about the future direction of oil, gold, and base metal prices.

Contents:

Oil
Gold
Copper
Aluminum

Oil

Oil prices stabilized after a two-day rise, supported by economic expectations for China and
geopolitical risks in the Middle East.
Brent crude traded near $71 per barrel after a 1.7% increase in previous sessions,
while West Texas Intermediate (WTI) crude surpassed $67 per barrel.

These movements came amid optimism from the world’s largest oil consumers, as China plans to boost consumption,
while U.S. retail sales showed stronger-than-expected results despite a slight slowdown.
At the same time, geopolitical tensions escalated as U.S. President Donald Trump stated
that Houthi attacks on shipping vessels in the Red Sea are considered direct threats from Iran.
Additionally, the U.S. administration tightened sanctions on Iran’s energy sector, adding to market uncertainty.

Impact of Sanctions on Iran and Oil Prices

Oil prices remain about $12 below their January peak due to increasing downward market pressures.
A growing global trade war threatens demand, while OPEC+ is set to raise production starting in April.
According to the International Energy Agency, the market is already facing a potential supply surplus.

Analysts at ANZ Group noted that U.S. sanctions on Iran could reduce supply by about one million barrels per day,
partially offsetting OPEC+’s gradual production increase.
Under these conditions, the immediate price spreads between crude oil futures have widened,
with the three-month Brent crude spread rising to $1.38 per barrel compared to its earlier low of $1.08.

Gold

Record High in Gold Prices Amid Middle East Tensions

Gold prices reached a record high, surpassing $3,017 per ounce,
driven by investor concerns over a slowing U.S. economy and escalating Middle East tensions,
which increased the appeal of gold as a safe-haven asset.

Gold rose by 0.6% on Monday before continuing its gains following Israeli airstrikes on Gaza,
which threatened an already fragile ceasefire.
Meanwhile, disappointing U.S. retail sales data affected the markets,
as they increased less than expected, causing a decline in U.S. Treasury yields, further boosting demand for gold.

Economic Outlook and Strengthening Gold’s Position

With market uncertainty persisting, concerns over the global economy have strengthened gold’s value
as a store of wealth during uncertain times.
The yellow metal has gained over 14% since the beginning of the year,
prompting several major banks to raise their gold price forecasts.

Spot gold prices stabilized at $3,014.06 per ounce after reaching an unprecedented level.
Meanwhile, the Bloomberg Dollar Index remained steady, with limited movement in silver prices,
while platinum and palladium recorded slight gains.

Copper

Copper Prices Surge Amid China’s Pledge to Boost Consumption

Copper prices reached a five-month high after China announced a plan to stimulate consumption and increase spending,
aiming to revive its economy as the world’s largest consumer of the metal.

The Chinese government introduced new measures over the weekend to boost spending by raising individual incomes.
Consumption in the country showed faster growth at the start of the year,
helping offset the impact of tariffs imposed by President Donald Trump,
which have put pressure on Chinese exporters. Retail sales grew by 4% in the first two months of the year, surpassing expectations.

Despite this, China’s real estate sector, a key pillar of metal demand, continues to struggle and has not yet hit its lowest point.
New home prices fell at a faster rate last month despite government efforts to support the market.

Aluminum

Aluminum Sees Recovery Amid Rising Production

Copper prices rose by 0.8%, reaching $9,861.50 per ton on the London Metal Exchange, the highest level since October.
Aluminum also increased by 0.2%, reaching $2,687 per ton,
driven by a 2.6% rise in China’s production to 7.32 million tons in the first two months of the year.

Chinese smelters benefited from higher profit margins due to rising product prices, allowing for more flexible production capacity.

Outlook for Commodity Markets

Amid ongoing geopolitical tensions and global economic changes, commodity prices remain volatile.
While China’s stimulus plans support demand for metals, oil prices face pressure from rising production and economic concerns.
Meanwhile, gold continues to gain strong momentum as a safe-haven asset, driven by fears of a global recession.

As markets anticipate monetary policy decisions and global economic shifts,
commodity prices will remain influenced by multiple factors,
ranging from economic policies to geopolitical conflicts,
making the upcoming period full of challenges and opportunities for investors.

Commodity Markets Under the Influence of Geopolitical Tensions and Global Economic Changes

Commodity Markets Under the Influence of Geopolitical Tensions

Related Topics