RIYADH: Commodities such as aluminum, gold, coal, and silver have seen prices rise after US-Israeli strikes on Iran triggered supply chain concerns and prompted countries to consider shifting away from oil and gas.
Gold and silver rose on March 10, supported by a weaker US dollar and easing energy costs after US President Donald Trump suggested that the war in the Middle East could end soon, Reuters reported.
The increases have not been as dramatic as those seen on the oil markets, which saw the cost of barrel of Brent surpass $119 on March 9, before falling back below the $100 threshold the next day.
Abdulrahman Al-Sudairy, CEO of Vault Saudi, told Arab News: “Beyond oil and gas, gold is seeing the clearest safe-haven demand as Iran tensions escalate, with prices rising on investor rotation into traditional hedges.”
He added that the Strait of Hormuz is the critical chokepoint to watch, as any disruption threatens not just oil flows, but Qatari liquified natural gas exports and the ammonia and urea derivatives that feed global fertilizer markets.
“Shipping rates and insurance premiums in the tanker and LNG carrier segments are already reacting, serving as a real-time gauge of how seriously markets are pricing the risk of escalation,” Al-Sudairy said.
Vijay Valecha, chief investment officer at Century Financial, said that as of March 10, gold climbed 0.76 percent to $5,177, while silver surged 2.27 percent to $89.
“Signs that the US–Iran standoff may be moving toward a resolution sent oil sharply lower and softened the dollar, aiding the yellow metal after weeks of volatile, liquidity‐driven selling,” Valecha said.
He added that, impacted by geopolitical risk, higher oil prices and sticky inflation, gold prices have suffered from dwindling expectations for aggressive rate cuts, leading to exchange-traded fund outflows and investors selling gold to cover other positions in the equity market.
“The multi-year buying streak by central banks, led by China, has continued to underpin prices structurally as it remains firm in its role as an alternative to the dollar-based system,” Valecha said.
Similarly, aluminum prices surged to their highest level in nearly four years before erasing gains, as escalating conflict in the Middle East worsened supply prospects from the region, according to Al-Eqtisadiah.
The metal rose as much as 2.8 percent to $3,544 a tonne in London, its highest level since March 2022, before retreating to trade about $100 lower.
The spread between spot and three-month aluminum contracts closed at $47.40 a ton on March 6, also the widest level since 2022, indicating tight immediate supplies.
Aluminum had already jumped nearly 10 percent in the week ending March 6 after the conflict disrupted shipments from the Arabian Gulf, which accounts for about 9 percent of global supply.
Buyers in the US rushed to secure alternative shipments from Asia after at least two major smelters in the Middle East — one in Qatar and the other in Bahrain — were forced to suspend deliveries.
Copper and other industrial metals also declined due to reduced risk appetite.
Coal prices jumped to their highest level since November 2024 as military strikes continued in the Middle East, prompting countries around the world to consider shifting away from oil and gas tied to the region.
Newcastle coal futures, the Asian benchmark, climbed 9.3 percent to $150 a tonne on March 9, according to Al-Eqtisadiah.
This coincided with a surge in crude oil prices, which approached $120 a barrel after producers in the Arabian Gulf cut output.
An Iranian drone attack last week forced Qatar to shut down the world’s largest LNG export facility, which accounts for about 20 percent of global supply.
This prompted buyers to seek alternatives, with some importers, such as Taiwan, considering increasing reliance on coal-fired facilities if gas supply disruptions persist.
Gas prices have also risen, with natural gas prices in Europe jumping as much as 30 percent on March 9, while spot prices in Asia have doubled over the past week and remain elevated.
