Crude Oil Prices Surge Above $107 as Hormuz Strait Tensions Rise, Gold Prices Decline Amid Inflation Fears

Commodity Markets Trade Mixed Amid Inflation Concerns

Commodity markets experienced a mixed trading session on May 15, with crude oil prices rising sharply while precious metals remained under pressure due to persistent inflation concerns and expectations of higher interest rates.

The Brent crude price rose 1.2 percent to trade near $107 a barrel, following a Fox News interview in which President Donald Trump stated that he did not need the Strait of Hormuz open. This development, coupled with ongoing concerns over supply disruptions in the key global energy shipping route, contributed to the volatility in oil markets. The West Texas Intermediate crude price for June delivery also gained 1.3 percent to $102.50 a barrel.

Oil Markets Remain Volatile Amid Iran Conflict and Supply Disruptions

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Investors continued to track developments surrounding the Iran conflict, which has been a major driver of oil market volatility in recent weeks. The Strait of Hormuz, a critical global energy shipping route, has been a focal point of concern, with potential disruptions to supply weighing heavily on oil prices.

Base Metals Segment Remains Mixed Amid Shifting Demand Signals

In the base metals segment, trends remained mixed, with copper prices under pressure and aluminium and zinc tracking broader weakness in manufacturing activity and global growth expectations.

Gold Prices Decline Amid War-Driven Inflation Pressures

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

Gold prices headed for a modest weekly decline as war-driven inflation pressures in the US reinforced expectations that interest rates could remain elevated for longer. Recent data showed US wholesale inflation accelerated in April at its fastest pace since 2022, while consumer inflation rose to its highest level since 2023. Rising Treasury yields and a stronger dollar also weighed on bullion prices.

Precious Metals Trade Lower Amid Inflation Concerns

Spot gold declined 0.6 percent to $4,623.11 an ounce, while silver fell 1.3 percent to $82.47 an ounce. Platinum and palladium also traded lower, as the Bloomberg Dollar Spot Index gained 0.1 percent and was up 0.9 percent for the week.

India Tightens Rules on Gold Imports Amid Inflation Concerns

India has tightened rules around gold imports after recently increasing import duties as part of efforts to defend the rupee and conserve foreign exchange reserves. This move has weighed on demand sentiment in the world's second-largest bullion market.

Inflation Concerns Take Center Stage Ahead of US Midterm Elections

Market participants said inflation concerns linked to the ongoing conflict are increasingly becoming a major focus for global markets ahead of the US midterm elections later this year.

Comparison of Commodity Prices