Commodity Research - Morning Insight - 05th Mar 2026 by Kotak Securities
Bullion – Spot gold and silver settled higher by over 1% on Wednesday, supported by weak dollar and rising geopolitical tensions in West Asia. Escalating conflict risks, following Iran’s drone and missile strikes across the region, boosted safe-haven inflows. Additionally, concerns that surging energy prices could renew inflationary pressures encouraged fresh buying interest in bullion as an inflation hedge. However, gains were partially trimmed after a rebound in equities and hawkish remarks from Cleveland Fed President Hammack,indicated that policy could remain on hold for an extended period. Stronger-than-expected US data, including a jump in the ISM Services PMI to 56.1 and ADP employment rising to 63K, reinforced economic resilience. Today, Gold advanced to 5190 as ongoing West Asia conflict supported safe-haven demand, with investors awaiting US labor data and Fed commentary for direction.
Crude Oil – WTI crude oil prices slipped to $73.6/bbl amid reports that Iran had indirectly reached out to the US to end the war. However, prices recovered after Iran denied the report, keeping USIran tensions elevated and the Strait of Hormuz closed for a 5 th consecutive day. However, upside was capped and prices closed at $74.66 after a volatile session, as US Treasury Secretary Scott Bessent signaled support for tankers in the Persian Gulf, including insurance backing and potential naval escorts. Besides, the U.S. EIA reported that US crude oil stocks rose by 3.5 million barrels (mb), distillate inventories increased by 0.5 mb, while gasoline inventories recorded a drawdown of 1.9 mb. Today, oil surged above $77/bbl as traders assess the real risks to supply amid prospects of a prolonged war and continued disruptions around the Strait of Hormuz.
Natural Gas – Nymex natural gas fell by over 4% to $2.91 per mmBtu, snapping 3-day rally, as LNG exports at maximum capacity and weak domestic demand persisted amid warmer weather forecasts.
Base metals – Base metals closed firm yesterday, led by aluminium which surged nearly 3% to settle around $3,342/ton to four years high driven by intensifying geopolitical tensions in West Asia that heightened fears of supply disruptions in a region accounting for nearly 10% of global aluminium production. Iran’s strikes across GCC countries prompted Qatar to halt aluminium operations, while major smelters in the UAE and Bahrain faced potential power outages and logistical challenges, particularly around the Strait of Hormuz. Aluminium’s broader supply outlook remains tight as China’s production is expected to level off after hitting its output cap, while expansion in alternative regions such as Indonesia continues to face regulatory and energy hurdles. Copper also rebounded despite earlier pressure from a stronger dollar and demand concerns.market remain focus on Western Asia tensions and signals from China’s Two Sessions after weak growth target.
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