Geopolitical risks from Greenland to Hormuz could extend bullion record rally

Commodities outlook for next Week

• Commodities markets remain alert to risk of disruptions through Strait of Hormuz
• Steady inflation and resilient consumer spending in US likely to keep Fed on hold in Jan meeting
• Trump’s speech, US PPI, and durable goods data to shape policy expectations

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Markets were turbulent this week ended January 23, driven by Trump’s Greenland shifts, fears of a transatlantic trade war and renewed US–Iran tensions.

The Dollar Index slipped to 97.42, its lowest level since September 2025, amid heightened volatility and shifting geopolitical dynamics. President Trump’s tariff threats against Europe and renewed push to acquire Greenland unsettled investors. Trump warned of “big retaliation” if European countries were to sell US Treasury holdings in response to proposed tariffs targeting NATO partners, amid speculation that Europe could use US assets as leverage.

Meanwhile, strong US economic data, including an upward revision to Q3 GDP to 4.4%, lower jobless claims, and steady PCE inflation, point to a reduced need for immediate policy easing. Still, US equities closed the choppy week with a second consecutive, albeit modest, weekly loss, as US–EU relations remained strained despite Trump stepping back from immediate tariff action and easing concerns of a US-EU trade war.

Bullion delivered a powerful breakout, with gold and silver posting fresh all-time highs amid surging safe-haven demand. Comex gold jumped over 8% on the week, extending gains for a third straight week to settle near $4,990 per troy ounce, marking its strongest weekly percentage advance since mid-2020, while Silver surged more than 14%, breaking the $100 per ounce level for the first time and settling above $103.

The rally was fueled by waning confidence in US assets, renewed trade frictions, a weaker dollar, ongoing geopolitical risks, and sustained central-bank buying. Concerns around US fiscal discipline, Federal Reserve independence, and stress in Japanese government bonds further amplified demand. MCX prices showed even higher volatility ahead of India's February 1 Union Budget.

Base metals posted broadly positive performance, led by nickel, which climbed over 6% on renewed supply uncertainty after Indonesia signaled tighter ore quotas and stricter enforcement against illegal mining. Copper advanced more than 2% to finish above $13,100 per tonne, though prices retreated from intraday highs toward the week’s end. Lead was the sole underperformer, slipping nearly 1%.

Copper reflected a rebalancing between lingering supply risks and improving near-term availability. Support came from production disruptions at Capstone Copper’s Mantoverde mine in Chile due to a labour strike, partially offset by progress toward restarting Freeport-McMoRan’s Grasberg operations. However, rising Comex inventories above 500,000 tons, global exchange stocks at their highest since 2018, and a deepening LME cash-to-three-month discount signaled easing tightness.

WTI crude oil ended the week modestly higher, rebounding sharply on Friday to a one-week high of $61.4 per barrel after the US imposed new sanctions on vessels and firms transporting Iranian oil, reviving geopolitical risk. Prices had earlier slipped below $59 per barrel following optimism around potential Ukraine-Russia-US talks, before reversing as Iran-US tensions escalated.

On the daily chart, MCX Crude Oil futures saw a strong rally last Friday, closing above the prior swing high of Rs 5,613 per barrel. With the price currently above both the Supertrend (7,3) and the 20 EMA, the trend bias is bullish. Momentum is expected to continue upward next week, facing initial resistance near Rs 5,820, then Rs 5,900. Support on any pullback is positioned at Rs 5,400.

With Iran warning that any attack would be treated as “all-out war,” markets remain alert to the risk of disruptions through the Strait of Hormuz, which carries roughly 20% of global crude flows. Looking ahead, steady inflation and resilient consumer spending in the US are likely to keep the Fed on hold in the upcoming meeting, while Trump’s speech, US PPI, and durable goods data will shape policy expectations.