Summary
- Markets remain entirely headline-driven, with uncertainty around Kharg Island and Hormuz flows keeping volatility elevated.
- Base metals are holding steady but lack conviction, with upside dependent on a clearer macro or geopolitical trigger.
- Oil continues to anchor inflation fears, while precious metals track dollar moves amid shifting confidence in USD.
Macro
US equities opened lower as the Middle East conflict entered its sixth week with no clear resolution in sight. Tensions escalated further after US strikes targeted Iran’s Kharg Island, the country’s main oil export hub handling around 90% of its oil shipments, pushing oil prices higher and reinforcing fears of prolonged disruption. With President Trump’s latest deadline approaching, markets are increasingly focused on the immediate outcome of negotiations, with the next move likely to set the tone across all asset classes.
What stands out is not just the direction of the conflict, but the degree of uncertainty. Markets are no longer trading a clear base case but instead reacting to rapidly changing headlines, making price action highly unstable. Even in the case of de-escalation, expectations are shifting towards a partial or informal pause rather than a clean resolution, which would still leave a residual risk premium in place.
The dollar weakened below 100, continuing to give back some of its safe-haven premium. There is a growing sense that confidence in the dollar is softening, particularly as the fiscal and geopolitical costs of the conflict mount. The US 10-year yield remained rangebound around 4.35%, suggesting that fixed income markets are in a wait-and-see mode, with investors reluctant to take strong directional views ahead of a binary geopolitical outcome.
Base Metals
Base metals were mixed, with price action remaining relatively contained despite heightened macro volatility.
Aluminium traded in a $3,460–3,540/t range, closing near $3,470/t, with low volumes pointing to a lack of conviction. Copper edged lower, testing support around $12,300/t, while LME on-warrant stocks rose to their highest levels since March 2018, highlighting ongoing availability in the system despite broader macro uncertainty.
Zinc outperformed, jumping to test $3,350/t before closing near $3,312/t, suggesting selective strength in metals with tighter near-term balances.
With expectations building for a weaker dollar and potential stabilisation in global growth dynamics, we see the complex as well-positioned for upside once a clear catalyst emerges, although for now, price action remains constrained.
Precious Metals
Precious metals softened slightly, continuing to trade in strong inverse correlation with the dollar. Gold dipped below $4,650/oz, while silver tested $70/oz before recovering above $71/oz.
Recent central bank activity adds an important layer to the outlook. China’s gold purchases in March rose to the highest level in over a year, reinforcing ongoing diversification away from dollar assets. Overall, central bank demand remains supportive in an environment of shifting confidence in the dollar.
Oil prices remained elevated, with WTI approaching $118/bbl before easing to around $116/bbl, while Brent held above $110/bbl.
We see oil as the dominant driver of the current environment. As long as prices remain elevated, inflation risks and macro uncertainty will persist, keeping markets highly sensitive to geopolitical developments.
Ceasefire update:
After the close, reports emerged of a temporary two-week ceasefire between the US and Iran, conditional on the reopening of the Strait of Hormuz and safe passage of shipping. While this may lead to a near-term easing in the energy risk premium, the agreement appears fragile and conditional, suggesting markets are likely to remain headline-driven rather than shifting to a sustained risk-on backdrop.
All price data is from 07.04.2026 as of 17:30