Geopolitical risks, China policy, US jobs data to shape commodity markets next week

Commodity markets outlook for next week

• Geopolitics, China’s two sessions, key US jobs data in focus for commodity markets next week
• MCX Gold futures showing signs of steady recovery after recent consolidation
• Oil prices may gain further as coordinated US–Israel strikes marked a significant escalation

Did our AI summary help?

US–Iran tensions, tariff uncertainty, and volatility in technology stocks drove asset moves this week ended February 27.

The US dollar held above 97.5 as resilient data reinforced expectations that interest rates will stay higher for longer. Weekly jobless claims came in lower than expected, while US consumer confidence rose to 91.2 in February, reinforcing signs of economic strength. Core PPI rose 0.5% month-on-month in January and 2.9% year-on-year, exceeding forecasts.

Market pricing has now pushed expectations for the first rate cut toward July, reflecting mixed commentary from Fed officials and a relatively hawkish tone in the January FOMC minutes. Meanwhile, major US equity benchmarks closed the week and month lower amid AI disruption concerns and its potential broader impact on jobs and the economy and concerns over geopolitics and tariffs.

Spot gold and silver surged to one-month highs of $5,277 per ounce and $94.17 per ounce, respectively, on Friday, closing the week up 4% and 11%, following fresh evacuation warnings from China and the United States Department of State urging citizens to leave Iran and Israel, heightening geopolitical risk across global markets. Gold notched a seventh straight monthly gain (8.5%), while silver posted a tenth (11%). Earlier in the week, bullion had already been supported by renewed concerns over trade protectionism after Donald Trump reiterated his commitment to expanding tariffs during a state address, alongside lingering uncertainty around US–Iran negotiations.

On the daily chart, MCX Gold futures are showing signs of steady recovery after recent consolidation, with prices holding above the 20 EMA and attempting to stabilize near the 0.50 Fibonacci retracement zone around Rs 1,61,690 per 10 gram. The overall structure indicates improving momentum, and price may remain bullish next week if it sustains above Rs 1,61,700, which could pave the way for a further test of Rs 1,67,500 (0.618 retracement). Immediate support is placed at Rs 1,58,100, followed by the crucial Rs 1,55,800 (0.382 retracement) level. A decisive hold above these supports would keep the broader upward bias intact.

Base metals ended the week mostly higher, with copper emerging as the standout performer. LME copper rose nearly 3% for a second consecutive weekly gain, reflecting growing optimism around China’s policy support after top leadership signaled more proactive fiscal measures and a moderately loose monetary stance to stimulate domestic demand.

Additional support came from fresh measures aimed at stabilizing the country’s prolonged property downturn as Shanghai relaxed homebuying rules, allowing non-residents who have paid social security contributions or individual income tax for one year to purchase homes in urban districts, down from the previous three-year requirement.

WTI crude oil climbed to $67.8 per barrel, its highest level since August 2025, buoyed by the rising likelihood of a strike on Iran as key sticking points remain unresolved in US–Iran nuclear talks. Washington is seeking a complete halt to Iran’s uranium enrichment, while Tehran has resisted full compliance, though it has indicated openness to limiting high-level activity. Iran maintains its right to peaceful nuclear energy, demands sanctions relief, and has ruled out concessions on its missile program or regional proxies.

Oil prices were volatile throughout the week, briefly slipping below $64 per barrel amid the resumption of talks, a sharp 16-million-barrel rise in US crude inventories, and expectations that OPEC+ may increase output by 137,000 bpd in April. Prices may gain further as coordinated US–Israel strikes on multiple Iranian cities, including the capital, Tehran, marked a significant escalation. Traders are also closely watching the upcoming OPEC+ meeting on March 1 for signals on supply adjustments ahead of peak summer demand.

Looking ahead, geopolitics will remain the dominant theme as tensions that had been simmering for months escalated over the weekend following US–Israel strikes across Iran. Tehran has previously vowed a “decisive” response if military options are pursued, raising the risk of wider regional conflict. At the same time, investor anxiety over AI disrupting entire industries is feeding concerns about private credit further weighing on sentiment.

Markets are also eyeing China’s annual “Two Sessions” meetings from March 4–11, where the 15th Five-Year Plan (2026–2030) is expected to be unveiled. The plan is likely to set a lower growth target in the 4.5%–5% range for 2026, compared with around 5% last year, alongside a moderately expansionary fiscal stance with the deficit ratio seen steady at 4% of GDP.

This week, investors will focus on speeches from Federal Reserve officials, final PMI readings from major economies, US jobless claims, retail sales, and, most importantly, the official US employment report. Hotter inflation data have added to headwinds that could delay the Fed’s easing cycle. If labour market conditions remain robust, expectations for a June rate cut may fade further. Conversely, a weaker jobs report could prompt markets to recalibrate rate expectations.