Geopolitical risks, Trump tariff vote, US inflation data in focus for commodities this week

Commodities outlook for current week

• Investors await potential Supreme Court ruling on Trump tariffs expected January 14
• US CPI, retail sales, weekly jobless claims, and speeches from several FOMC officials to be key in shaping expectations for the monetary policy outlook

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Solid gains were recorded across equities and commodities in the first full trading week of 2026 as markets digested a mixed US jobs report alongside heightened geopolitical uncertainty.

The US dollar climbed to a one-month high of 99.26, marking a second consecutive weekly gain following the mixed US jobs report. While job creation fell short of expectations in December, pointing to some softening in the labour market, firmer wage growth and an unexpected dip in the unemployment rate reduced the urgency for an immediate rate cut. Markets now price the probability of a 25 bps cut at the January FOMC meeting at just 5%. At the same time, the lower jobless rate raised hopes that labour market momentum could pick up in the coming months, helping US equities maintain their upward trajectory. US stocks posted solid gains, with both the S&P 500 and Dow Jones hitting record highs.

Spot gold and silver reached one-week highs of $4,517 per ounce and $82.80 per ounce, respectively, buoyed by safe-haven demand following the US capture of Venezuela’s president and Trump’s subsequent threats toward resource-rich regions such as Greenland, Cuba, and Mexico. Gold finished the week up 4%, supported by the People’s Bank of China extending its gold-buying streak to a 14th consecutive month. Silver surged more than 11%, underpinned by persistent structural supply constraints and rising industrial demand.

MCX Gold futures saw a 2.3% increase to close the week at 138,875. On Monday, the price has opened up and is currently trading at its highest point ever. A bullish trend is confirmed by the price remaining above the 20-day EMA and Supertrend (7,3). Although there may be resistance near Rs 1,43,400 per 10 gram, we expect that the price will maintain its strong momentum this week. Rs 1,38,800 is the closest support, followed by Rs 1,37,500.

Base metals extended their strong start to the year, logging a fourth straight weekly gain, though volatility increased as prices pushed into record territory. Copper, aluminum, and nickel all rose more than 4%, while zinc lagged with a modest gain of under 1%. Copper briefly broke above $13,000 per ton before easing on profit-taking and dollar strength. Nickel outperformed, rallying more than 5% after Indonesia signaled tighter regulation and possible output curbs, prompting short covering despite an overall oversupplied market.

Crude oil also joined the rally, with WTI rising 3% to close above $59 per barrel, buoyed by escalating anti-government protests in Iran and the US employment report. Prices received an additional boost from the annual rebalancing of major commodity indices, which is expected to trigger further buying of oil futures in the coming sessions.

Oil markets remain particularly sensitive to geopolitical developments. President Trump warned of a “hard” response should Iranian authorities intensify their crackdown on protesters, while Iran has signaled it could act preemptively if it detected external threats. Traders are also closely monitoring a US congressional proposal that could impose tariffs of up to 500% on countries continuing to purchase Russian oil, with a vote potentially taking place as early as this week.

The current week opened with US stock futures and the dollar sliding, gold and silver hitting record highs on safe-haven bids as federal prosecutors' criminal probe into Fed Chair Jerome Powell marks a sharp Trump escalation, stoking fears over central bank independence.

Broader market sentiment remains fragile as President Trump continues to discuss a range of options, including military ones, to acquire Greenland, shortly after US actions in Venezuela, while investors also await a potential Supreme Court ruling on Trump tariffs expected January 14. Looking ahead, US CPI, retail sales, weekly jobless claims, and speeches from several FOMC officials will be key in shaping expectations for the monetary policy outlook.