Market Intelligence &
Commodity Insights
Analysis and commentary on global commodity markets, supply chain developments, regulatory changes, and ESG trends — from our trading desks in Dubai, Noida, Houston, and Arua City.
Gold and Silver Reverse Sharply as US-Israel-Iran Conflict Triggers Dollar Surge and Mass Liquidation
Gold, which had traded above $3,400/oz as recently as mid-March 2026, has fallen to approximately $2,850/oz — a correction of nearly 17% in under six weeks — as the outbreak of direct military hostilities between the United States, Israel, and Iran has produced a market dynamic that has confounded many investors who held precious metals as a geopolitical hedge. The counterintuitive sell-off reflects several simultaneous forces. First, the US dollar has surged to multi-year highs as global capital seeks the safety of USD liquidity in a crisis environment, applying direct downward pressure on dollar-denominated commodities. Second, the scale of the conflict has triggered forced liquidation across institutional portfolios as funds manage margin calls and reduce gross exposure across all asset classes. Third, the suspension of normal trade flows through the Persian Gulf and the closure of major commodity hubs in the region has disrupted the physical settlement infrastructure that underpins spot precious metals markets. Silver has been hit harder than gold — falling from above $38/oz to approximately $28.50/oz — as its larger industrial component exposes it to the demand destruction implied by a potential global economic contraction. Physical gold premiums in Dubai have collapsed as regional trading activity is severely curtailed, though our desk continues to operate and monitor the situation closely. The critical question for market participants is whether this represents a temporary crisis dislocation — from which gold typically recovers strongly — or the beginning of a deeper correction driven by sustained USD strength and recession risk.
Strait of Hormuz: Closure Fears Send Brent Crude Above $115 and LNG Markets Into Crisis
The Strait of Hormuz — through which approximately 20% of global oil supply and a significant share of LNG exports transit daily — has become the focal point of energy market fears as direct US-Iranian military hostilities have escalated. Iran's repeated threats to close the strait, combined with confirmed attacks on commercial shipping in the Persian Gulf, have pushed Brent crude above $115/bbl, the highest level since 2022. WTI has followed, with the US strategic petroleum reserve being partially activated to contain domestic gasoline price inflation. LNG markets have been disrupted more severely: several Qatari LNG cargoes have been delayed or diverted, and buyers dependent on Gulf LNG supply are competing aggressively for Atlantic Basin and Australian cargoes, driving spot LNG prices in Asia to levels not seen since the immediate aftermath of the 2022 European energy crisis. The consequences extend beyond oil and gas: petrochemical feedstock supply chains are under severe stress, fertiliser markets dependent on Gulf gas are tightening rapidly, and freight rates for tankers navigating alternative Cape of Good Hope routes have surged. Energy traders are operating in an environment of extreme volatility and genuine physical supply uncertainty — a combination that demands exceptional risk management discipline and counterparty due diligence.
War, Dollar, and Recession Fear: How the US-Israel-Iran Conflict Is Repricing Every Commodity Market
The outbreak of direct US-Iran military hostilities has produced one of the most complex multi-directional commodity market dislocations in recent memory. Unlike previous Middle East conflicts — which typically produced a straightforward spike in oil and gold as risk assets — the current situation is generating divergent price action across commodity classes that reflects the interaction of several competing forces. Energy commodities, particularly crude oil and LNG, have surged on supply disruption fears centred on the Strait of Hormuz and direct strikes on Iranian production infrastructure. Precious metals, paradoxically, have fallen sharply as the resulting dollar surge and forced portfolio liquidation have overwhelmed the traditional safe haven bid. Base metals have sold off heavily on recession fear: copper has fallen below $9,000/MT as markets price in a potential global demand shock if the conflict triggers an extended energy crisis and geopolitical fragmentation. Agricultural commodities present a mixed picture: wheat has rallied on supply chain disruption fears given Middle Eastern import dependencies, while palm oil has weakened on demand destruction concerns. The common thread across all markets is extreme uncertainty and thin liquidity — conditions that have widened bid-offer spreads to levels not seen in years and are causing significant stress in the physical settlement infrastructure that connects paper markets to real-world supply chains.
Gold's Correction in Context: Historical Precedent Suggests Strong Recovery Once Dollar Stabilises
While gold's near-17% correction from its March 2026 peak has been jarring for holders who viewed the metal as a crisis hedge, a review of historical precedent across comparable geopolitical shock events provides important context. In virtually every prior instance where gold sold off sharply during an initial military crisis — driven by dollar strength and forced liquidation — the metal recovered to pre-crisis levels and typically made new highs within six to twelve months, as the underlying structural demand drivers reasserted themselves. The current sell-off does not reflect a fundamental deterioration in gold's demand outlook: central bank purchasing programmes remain active, ETF redemptions have been orderly rather than disorderly, and physical buying from Asian retail markets has accelerated significantly at prices below $2,900/oz. What has changed is the near-term balance of forces — dollar momentum, margin calls, and crisis-mode risk reduction have temporarily overwhelmed the structural bid. Our desk remains constructive on gold over a six to twelve month horizon: if the conflict de-escalates and the dollar retreats from its current peaks, the structural central bank and investor demand that drove gold to $3,400/oz remains entirely intact. The current price environment is creating meaningful opportunities for well-capitalised physical buyers.
Middle East Supply Chain Disruption: Physical Commodity Trading Adapts to a Transformed Regional Landscape
The direct involvement of the United States in military operations against Iran has fundamentally altered the operating environment for commodity trading houses with Middle Eastern exposure. Dubai, which serves as the region's premier commodity trading hub and hosts significant precious metals, energy, and agricultural trading infrastructure, has experienced severe disruption to normal commercial activity. Flights have been suspended across multiple Gulf carriers, insurance premiums for cargo transiting the region have increased tenfold in some commodity categories, and several major counterparties have invoked force majeure clauses on Gulf-routed physical deliveries. The DIFC and DMCC — Dubai's primary financial and commodity trading free zones — have remained operationally open, though activity is significantly curtailed. Trading houses are rapidly reassessing their Middle Eastern logistics infrastructure and identifying alternative routing options: Cape of Good Hope routing for tankers, overland transit through Turkey and the Caucasus for some cargo categories, and increased use of Singapore and Hong Kong as temporary trading and settlement hubs. The longer-term implications for Dubai's role as a commodity trading centre will depend heavily on the duration and resolution of the conflict. For firms with diversified global infrastructure — multiple offices, flexible logistics networks, and strong relationships across non-affected jurisdictions — the disruption, while significant, is manageable.
Copper Falls Below $9,000/MT as War-Driven Recession Fears Overwhelm Structural Demand Narrative
Copper's status as the commodity most sensitive to global economic growth expectations has made it a barometer of the market's assessment of the conflict's macroeconomic implications. From a Q1 2026 high above $10,500/MT — itself driven by the structural demand narrative around energy transition and AI data centre build-out — copper has fallen sharply to below $9,000/MT as the US-Iran conflict has raised the probability of a global economic contraction in market pricing. The mechanisms are straightforward: an extended Strait of Hormuz disruption would spike energy costs for energy-intensive industrial processes including copper smelting; a broader geopolitical shock would reduce investment in the infrastructure projects that underpin long-term copper demand; and the recession that most economists now attach meaningful probability to would reduce near-term industrial demand across all sectors. The structural demand case — AI infrastructure, energy transition, electrification — has not disappeared, but it is a multi-year story that near-term demand destruction can temporarily overwhelm. LME copper warehouse stocks have risen as physical buyers defer purchases and wait for price clarity. At current levels, a significant proportion of global copper mining capacity is operating near or below cash cost — a dynamic that will eventually support a price floor, but which may take time to assert itself against the current macro headwinds.
Silver Underperforms Gold in the Sell-Off: Industrial Exposure Amplifies the Decline
Silver's fall from above $38/oz to approximately $28.50/oz represents a steeper percentage decline than gold's correction, and reflects the metal's dual nature as both a monetary asset and an industrial commodity. In a risk-off environment driven by genuine recession fear, silver's industrial demand component — which accounts for over 60% of total consumption — becomes a vulnerability rather than a strength. Solar panel manufacturers, electronics producers, and EV component suppliers are all curtailing purchase commitments as they reassess capital expenditure plans in light of the economic uncertainty created by the US-Iran conflict. The gold-silver ratio, which had compressed toward 88x as investors recognised silver's structural demand story, has blown back out above 100x — a level that historically has marked attractive entry points for long-term silver investors willing to look through near-term volatility. Physical silver markets are showing an interesting divergence: while futures prices have fallen sharply, premiums for retail coins and small bars have actually widened, suggesting retail investors are using the dip as a buying opportunity. Industrial buyers, by contrast, are standing aside and allowing inventories to draw down from existing stock rather than committing to new purchases at prices that may fall further if the macroeconomic outlook deteriorates.
Oil Above $115: The Inflationary and Recessionary Consequences of a Sustained Energy Price Shock
With Brent crude trading above $115/bbl and gasoline prices in the United States approaching record highs, the economic consequences of the US-Iran conflict are becoming tangible for consumers and businesses globally. The dual threat of inflation — energy costs flowing through to food production, transport, and manufacturing — and recession, driven by the demand destruction that high energy prices inevitably produce, has placed central banks in an impossible position. The Federal Reserve, which had been in a cautious easing cycle, faces renewed inflation pressure at precisely the moment when growth risks are rising. Several emerging market central banks with significant oil import dependence have already been forced to raise rates defensively to protect currencies that are weakening against the dollar. For commodity markets, sustained oil above $100/bbl is historically associated with a period of demand destruction followed by sharp price correction once supply adjustments or demand responses take hold. However, if the Strait of Hormuz remains physically threatened for an extended period, the normal supply-response mechanisms are constrained in ways that make historical analogies imperfect. Natural gas markets globally are experiencing parallel disruption, with European TTF and Asian JKM LNG prices reaching levels not seen since the acute phase of the 2022 energy crisis.
Wheat and Food Security: Middle East Import Dependency Creates Acute Vulnerability
The countries most exposed to the direct effects of the US-Iran conflict include several of the world's largest wheat importers. Egypt, the world's largest wheat buyer, sources a significant share of its grain through Black Sea origins that transit through or near the Eastern Mediterranean. Iran itself imports substantial quantities of wheat, corn, and feedgrains. The disruption to regional logistics and financing channels — combined with the sharp depreciation of several Middle Eastern and North African currencies against the dollar — has created acute import affordability challenges across a region already dealing with elevated food price inflation. CBOT wheat futures have rallied approximately 12% since the conflict escalation, reflecting genuine supply chain concern rather than a physical production shortfall. The World Food Programme has issued urgent warnings about food security deterioration across several Middle Eastern and North African nations, with particular concern about Yemen, Syria, and Lebanon, which have limited foreign exchange reserves and already-fragile food systems. For agricultural commodity traders, the disruption to normal payment flows — several regional buyers are experiencing difficulties with letter of credit confirmation from Gulf banking systems — is adding operational complexity to a market already strained by logistics challenges.
EU Carbon Border Adjustment Mechanism: Full Regime Now Live Amid a Dramatically Changed Energy Landscape
The EU Carbon Border Adjustment Mechanism entered its definitive phase on 1 January 2026, imposing real financial obligations on importers of aluminium, steel, iron, and other carbon-intensive materials into the EU. The regulation's implementation has been complicated by the dramatic energy market disruption caused by the US-Iran conflict: the surge in European energy prices has paradoxically improved the relative cost position of some non-EU producers who are insulated from European power market exposure, while simultaneously increasing the embedded carbon intensity of EU domestic production at gas-fired facilities. CBAM certificate prices, tied to EU ETS carbon prices which have fallen sharply as recession fears have reduced industrial activity, now sit around €55/MT CO2 — lower than the €70+ levels that prevailed before the conflict. The market bifurcation between low-carbon and standard aluminium remains significant, with Icelandic and Norwegian hydropower-backed material commanding premiums of $150-180/MT. Trading houses must continue to collect verified embedded carbon data from all suppliers — a requirement that has become more challenging as several Middle Eastern aluminium producers are experiencing operational disruptions due to the conflict.
CSDDD Is Now Law: What EU Corporate Sustainability Due Diligence Means for Commodity Trading Houses
The EU Corporate Sustainability Due Diligence Directive, transposed into member state law across most EU jurisdictions by end-2025, now imposes mandatory human rights and environmental due diligence obligations on companies operating in or supplying into the EU above defined thresholds. For commodity trading houses, the directive requires identification, prevention, mitigation, and remediation of adverse impacts not just within a company's own operations but across its upstream value chain. The current geopolitical crisis adds a further dimension of complexity: conflict-affected and high-risk areas are now explicitly in scope for enhanced due diligence, and trading houses with supply chains running through or near active conflict zones must demonstrate that their sourcing practices do not contribute to or benefit from the financing of armed conflict. The civil liability consequences — which allow affected persons to bring claims before EU courts — represent a material legal risk for firms that cannot demonstrate robust and documented due diligence processes. Trading houses with established compliance infrastructure and long-standing supplier relationships are best positioned; those relying on spot purchasing without structured due diligence programmes face significant exposure in the current environment.
Lithium's Recovery Narrative Stalls as War-Driven Economic Uncertainty Dampens EV Outlook
The tentative lithium price recovery that had begun to emerge in early 2026 — on the back of supply curtailments and re-accelerating EV demand — has been interrupted by the economic uncertainty generated by the US-Iran conflict. Lithium carbonate prices in China, which had stabilised around $13,000/MT in January 2026, have softened again toward $10,500/MT as automakers revise EV production schedules downward in response to weakening consumer confidence and rising energy costs. The energy price shock has a particular impact on battery manufacturing economics: lithium processing is highly energy-intensive, and the surge in industrial electricity prices across Asia and Europe is squeezing refiner margins. Several announced capacity expansion projects have been deferred. The long-term structural case for lithium — underpinned by the scale of battery capacity required for the energy transition — remains intact but is being overwhelmed by near-term demand uncertainty and a macro environment that is reducing capital availability for the project investments required to bring new supply online. Analysts who were forecasting a 2026 price recovery are now pushing their target timelines into 2027, contingent on conflict resolution and stabilisation of the broader economic environment.
EUDR in Force: Deforestation Compliance Reshaping Palm Oil, Cocoa, and Soy Flows Into the EU
The EU Deforestation Regulation came into full force for large operators in January 2026, prohibiting the placing on the EU market of cattle, cocoa, coffee, palm oil, soya, wood, and rubber products unless produced on land free from deforestation since 31 December 2020. Implementation has been uneven: large integrated traders with direct supplier relationships and established geolocation traceability systems are broadly compliant, while mid-tier traders relying on origin-country aggregators are struggling to meet the plot-level geolocation data requirements. A significant volume of Indonesian and Malaysian palm oil — estimated at 15-20% of total EU-destined supply — currently lacks the documentation required for EUDR compliance, and is being redirected to non-EU markets including India, China, and Pakistan. The conflict in the Middle East has added a further complication: several Middle Eastern vegetable oil importers who might have absorbed redirected EU-excluded material are themselves facing import financing and logistics challenges, creating a temporary oversupply in the non-EU market that is compressing palm oil prices globally. For compliant traders, the EUDR environment is creating pricing power and market share gains — a tangible return on the compliance investments made over the past two years.
Q1 2026 Market Commentary: From Record Highs to Crisis Dislocation — Navigating the Most Volatile Quarter in Years
The first quarter of 2026 will be remembered as one of the most dramatic periods in recent commodity market history — beginning with gold at all-time highs, copper at multi-year peaks, and an environment of cautious optimism, and ending with the outbreak of direct US-Iran military hostilities that has repriced virtually every commodity market in ways that continue to evolve daily. Our trading desk entered the quarter well positioned across the precious metals complex, with physical gold inventory sourced at competitive levels from our East African network and hedged appropriately on the COMEX forward curve. The sharp reversal in precious metals prices that followed the conflict escalation has required active position management, though our hedging discipline has contained the P&L impact. In energy, our exposure has been skewed toward the buy side given our view on Strait of Hormuz risk, a position that has performed strongly as Brent has exceeded $115/bbl. Our Dubai office continues to operate, though regional trading activity is severely curtailed and our team is managing logistics and counterparty relationships under genuinely difficult conditions. Base metals positions have been reduced and defensively positioned given the recession risk now priced into the macro outlook. Looking ahead, our central scenario is a conflict that is intense but relatively contained in duration — the economic costs of a protracted Strait of Hormuz closure for all parties are severe — and we are actively preparing our physical buying programmes for what we believe will be a significant precious metals recovery once the dollar stabilises and safe-haven demand reasserts itself through physical rather than paper market channels.
Market Snapshot
Indicative prices — April 2026
Gold (XAU)
USD/oz
2,847.30
-16.3%
Silver (XAG)
USD/oz
28.54
-24.9%
Copper (HG)
USD/MT
8,940
-14.8%
Crude (Brent)
USD/bbl
116.40
+56.6%
Platinum (XPT)
USD/oz
918
-12.4%
Natural Gas
USD/MMBtu
4.92
+54.7%
% change reflects move since conflict escalation. For reference only.
Key Themes — April 2026
- Gold & silver correcting sharply: dollar surge and forced liquidation override safe haven bid
- Crude above $115: Strait of Hormuz closure fears driving energy crisis
- Middle East supply chain disruption: Dubai operations curtailed, routes re-mapped
- Base metals pricing in global recession risk — copper below $9,000/MT
- CBAM, CSDDD, EUDR: compliance obligations unchanged despite market turmoil
- Food security: wheat rally as Middle Eastern import markets face financing disruption
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