Today, the commodity market is in the spotlight amid intensifying violence in West Asia. Sharp price movement has been observed in commodity prices amid the increased geopolitical tensions surrounding the US and Israeli attack on Iran. Silver is trading about $95/oz, while Brent Crude has surged to around $80/bl. Gold is stable at $5,300 per ounce.
The crisis in West Asia is likely to keep crude oil prices high in the short term since there is still a genuine tail risk of interruption, especially if the Strait of Hormuz closes.
History, however, indicates that geopolitically motivated increases are typically brief but intense. Risk premiums should progressively decline as and when the situation on the ground in Iran stabilizes, allowing prices to drop from high levels.
Fuel prices at petrol stations and the Consumer Price Index, which serves as the primary gauge of inflation in the United States, would both be impacted by the over 30% increase in oil prices in 2026.
Energy markets are reacting as well; concerns about supply disruptions via vital channels such as the Strait of Hormuz are driving up crude oil prices, which exacerbates risk-off mood and encourages interest in bullion.
Safe-haven flows are also anticipated to fuel price spikes for precious commodities like gold and silver. He did add, though, that geopolitical upswings usually don’t last until they are followed by macro or structural monetary changes. We still anticipate that deeper structural themes rather than sporadic geopolitical flare-ups will propel gold toward $6,000 by 2026 and silver to test $105 this year.
Increased geopolitical risk, he continued, can push investors toward conventional safe-haven assets like gold and silver, and a gap-up opening for bullion markets is widely anticipated. Though, that previous actions have already raised the price of gold and silver in recent sessions, and this trend may continue if the dispute heats up much more.
