DBT Bureau
Pune, 2 June 2026
Global commodity markets remained volatile as geopolitical tensions in the Middle East, shifting supply dynamics, and inflation concerns influenced gold, crude oil, and base metals prices, while production trends in China and Chile shaped the industrial metals outlook.
- Gold prices came under pressure as a strengthening U.S. dollar and higher crude oil prices reduced the metal’s appeal as a safe-haven asset. Market participants remained cautious, awaiting clarity on U.S. President Donald Trump’s stance regarding a proposed extension of the Iran ceasefire.
- The U.S. and Iran reportedly reached an agreement last week to extend their ceasefire and lift restrictions on shipping through the Strait of Hormuz, though it had not been finalized.
- Meanwhile, heightened geopolitical tensions involving the U.S., Israel, and Iran have amplified inflation risks, reinforcing market expectations that the Federal Reserve may maintain a tighter monetary policy stance, including the possibility of additional interest rate hikes.
- Crude oil prices advanced amid escalating geopolitical tensions, as Iran and the U.S. exchanged strikes, while Israel ordered an expanded ground movement into Lebanon in its confrontation with Iran-backed Hezbollah.
- International Energy Agency said that the global oil supply is expected to fall short of demand this year, as the Iran conflict disrupts Middle East production and tightens market balances.
- Indian refiners turned to imports from Latin America and Africa after supplies from the Middle East were disrupted.
- Base metals posted broad gains, supported by concerns over tightening supply conditions. However, upside momentum was limited by uncertainty surrounding a potential Iran peace agreement and weak manufacturing activity in China, the world’s largest metal consumer.
- Copper output at Chile’s state owned Codelco declined 9.98% yoy in March to 110,900 tonnes. Production at Escondida, the world’s largest copper mine, dropped 15.75% to 101,600 tonnes, while Collahuasi, operated by Glencore and Anglo American, saw output fall 10.80% to 31,400 tonnes.
- China’s aluminium output rose by 3.1% from a year earlier to 3.87 million metric tonnes in April. In the first four months of the year, China produced 15.33 million metric tonnes, a rise of 3.5% from the same period last year.
Source: Geojit Investments
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