Commodity Research - Daily Evening Track - 04-Feb-2026 by Kotak Securities Ltd
Gold reclaims $5,090 as dip buying emerges, Crude oil advances on renewed geopolitical risk
Gold extended its rebound for a second session, gaining over 2% to trade above $5,050 an ounce as buyers returned after a sharp fall from record highs. Prices have reclaimed the $5,000 level amid a softer US dollar and a renewed appetite for risk, while year-to-date gains still stand near 17%, keeping the broader uptrend intact. Silver also moved higher after last week’s heavy liquidation. Precious metals had surged aggressively through January, driven by speculative flows, global tensions, and anxiety around the Federal Reserve’s autonomy. That rally stalled abruptly, with silver posting a record single-day fall and gold suffering its steepest drop since 2013. Fresh geopolitical strain resurfaced after US forces downed an Iranian drone in the Arabian Sea, reviving safe-haven demand. Looking ahead, US ADP employment data and ISM Services PMI will shape dollar direction. Fundamentally, gold remains supported by macro uncertainty, softer real yields, and persistent geopolitical risk, though nearterm volatility is likely to stay elevated
WTI crude extended its advance to trade near $63.50 per barrel, supported by a fresh rise in geopolitical risk across key Middle East transit routes. Prices gained nearly 2% on Tuesday after U.S. forces downed an Iranian drone near the Abraham Lincoln carrier group, while Iranian gunboats moved close to a U.S.-flagged tanker in the Strait of Hormuz. These incidents revived concerns over supply security through the world’s most critical oil corridor, which handles the bulk of exports from Saudi Arabia, Iran, Iraq, Kuwait, and the UAE. Further support came from industry data showing a sharp 11-million-barrel draw in U.S. crude inventories, pointing to tighter near-term balances. Diplomatic uncertainty added to risk premiums as Iran pushed to limit upcoming talks with Washington to nuclear issues only, casting doubt on broader deescalation. With inventories tightening and geopolitical risk elevated, crude remains biased to the upside in the near term, though sustained gains will depend on whether supply disruptions move beyond threats into actual flow constraints.
Base metals are trading on a mixed footing, with zinc and nickel posting gains, while copper and aluminium remain under pressure. Copper is down nearly 1% at around $13,360/ton, trimming part of Tuesday’s sharp rebound as rising inventories across Shanghai, London and Comex weighed on sentiment. Copper has diverged from gold and silver, which continue to see safe-haven inflows, as markets reassess softer physical demand and ample near-term supply. Nevertheless, demand from Chinese manufacturers on pullbacks, alongside proposals to increase strategic reserves, continues to underpin the market. Elsewhere, nickel rebounded on expectations of tighter supply following Indonesia’s move to cut mining permits.
US natural gas prices are moving sideways near $3.30/MMBtu, stabilizing after Tuesday’s rebound that recovered part of Monday’s sharp 25% selloff. Prices found support from mixed weather signals, with above-normal temperatures forecast for the Midwest and South, while colder conditions persist across the Northeast into mid-February. Last week’s rally to a three-year high was driven by storm-related supply losses and a surge in heating demand, with nearly 15% of output temporarily offline. Production has since recovered, but demand and LNG flows remain elevated. Fundamentals point to near-term consolidation with volatility tied to weather and export demand.
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