Crude Prices Remain Above $105 Amid Ongoing Strait of Hormuz Tensions

Commodity Markets Trade Higher Amid Global Macroeconomic Cues

Commodity markets experienced a positive trading session on May 12, with crude oil, base metals, and precious metals reacting to global macroeconomic cues, currency movements, and demand signals from major economies.

Brent Crude Prices Rise 1 Percent Brent crude hovered around $105 per barrel, rising nearly 1 percent after President Donald Trump cast doubt on the Iran ceasefire, prolonging uncertainty around the Strait of Hormuz closure and keeping energy markets on edge. The Strait of Hormuz is a critical waterway for global oil exports, and any disruptions to the region have significant implications for energy markets.

Base Metals Trends Remain Mixed In the base metals segment, trends remained mixed. Copper traded at $649.55 per pound, while aluminium and zinc moved marginally higher. The mixed trends in base metals reflect the ongoing uncertainty in global markets, as investors assess the impact of the Iran conflict on commodity prices.

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Precious Metals Witness Limited Movement Precious metals witnessed limited movement. Gold prices declined near $4,724 per ounce as traders assessed the continuing deadlock around the Strait of Hormuz, which has pushed oil prices higher and intensified inflation concerns. Silver gained 0.4 percent to $86.42 per ounce, while platinum and palladium also advanced.

Domestic MCX Prices Reflect Global Cues and Rupee Movement On the domestic front, MCX prices reflected both global cues and rupee movement, while volatility remained contained. The Bloomberg Dollar Spot Index was 0.1 percent higher compared to the previous session, indicating a slight strengthening of the US dollar against major currencies.

Trump's Comments Renew Focus on Inflation Concerns Trump described Iran's response to last week's $ peace proposal as "a piece of garbage" and said the fragile ceasefire around the Strait of Hormuz was on "massive life support," indicating no immediate end to the conflict that has disrupted global energy markets. The comments came ahead of a key $ inflation report due Tuesday, which economists expect to show a sharp rise in consumer prices due to higher energy costs triggered by the Iran conflict.

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