Gold and Silver Prices Decline Amid Rising US-Iran Tensions, But One Precious Metal Sees Sizable Gains

Global Aluminium Prices Reach Four-Year High Amid US-Iran War Tensions

Benchmark aluminium prices on the London Metal Exchange (LME) touched $3,544 per metric ton on [date], its highest level since March 31, 2022. The most-active aluminium contract on the Shanghai Futures Exchange jumped 3.29% to 25,310 yuan ($3,658.15) per ton, hitting an intraday high of 25,860 yuan, its strongest level since January 30.

Aluminium prices on the Multi Commodity Exchange (MCX) rose nearly 3% to ₹350.90 per kg on Monday, while gold and silver prices witnessed a sharp decline of up to 3.5% despite escalating tensions in the Middle East.

The escalating tensions between the US and Israel against Iran have disrupted shipping through the Strait of Hormuz, a vital Gulf waterway responsible for roughly 9% of global aluminium production. The lightweight metal, widely used in construction and packaging, recorded its biggest weekly gain since January 2023 last week as supply worries intensified after Qatalum, a Qatari smelter, started curbing production and Aluminium Bahrain declared force majeure on shipments.

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Global Aluminium Market Outlook

The global aluminium market was already running tight, and the conflict in West Asia is now exposing just how fragile the supply chain has become. The region produces roughly 6.5 million tonnes of aluminium annually, or close to 10% of global output, built on cheap energy and proximity to key shipping routes.

Commodity Strategists' Outlook

Ewa Manthey, commodities strategist at ING, estimates that the escalating tensions in the Middle East could drive aluminium prices above $4,000 per tonne. Anindya Banerjee, Head of Commodity and Currency Research at Kotak Securities, believes that prices have already begun reflecting the tightening balance, with LME aluminium trading around $3,450 per tonne, and if disruptions persist, it would not be surprising to see prices test the $3,800–$4,000 range.

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