Commodity markets remained volatile on Wednesday, May 20, as investors tracked developments surrounding the US-Iran conflict, inflation concerns, Federal Reserve rate expectations and fresh US energy inventory data.
On MCX, silver surged 1.53% or 4,134 points to Rs 2,74,253, while gold rose 0.53% or 840 points to Rs 1,59,920 during the evening session. Copper gained 1.17% to Rs 1,353.15, zinc climbed 0.90% to Rs 369.60 and aluminium advanced 0.44% to Rs 386.10.
Energy commodities remained under pressure. Crude oil futures on MCX dropped 4.11% or 412 points to Rs 9,615, while natural gas futures declined 2.54% or 7.6 points to Rs 291.8.
Globally, silver traded above $76 an ounce despite a sharp decline in the previous session, supported by expectations that a potential resolution in the US-Iran conflict could eventually ease inflation pressures. Gold also recovered towards $4,530 an ounce after touching its lowest level since March 30.
President Donald Trump stated that the Iran war could end “very quickly,” while Vice President JD Vance highlighted progress in negotiations with Tehran. However, the prolonged disruption around the Strait of Hormuz has continued to keep oil prices elevated above $100 per barrel, sustaining inflationary pressures globally.
Markets are now pricing in nearly a 40% chance of a Federal Reserve rate hike by December, while expectations for rate cuts have been pushed into 2027.
Crude oil prices extended losses despite a sharp drawdown in US crude inventories. Brent crude fell near $107 per barrel, while WTI crude traded close to $100.64 per barrel after the US Energy Information Administration reported a 7.9 million barrel decline in commercial crude oil inventories for the week ended May 15.
The EIA also reported a 1.5 million barrel draw in gasoline inventories, while distillate fuel stocks rose by 372,000 barrels. US crude production remained steady at 13.7 million barrels per day.
Meanwhile, average US ethanol production rose above 1.1 million barrels per day for the first time since April, reaching 1.11 million barrels per day in the latest weekly EIA report. Ethanol stockpiles edged slightly higher to 24.88 million barrels.
Natural gas prices eased globally as forecasts pointed to milder weather conditions and lower US gas demand following the recent heatwave in the Mid Atlantic region. US natural gas futures slipped 1.2% to $3.078 per mmBtu after touching the highest level since March 19 in the previous session.
LSEG data showed average US natural gas output in the Lower 48 states eased to 109.3 billion cubic feet per day in May from 109.8 bcfd in April. LNG export flows also declined due to maintenance activity at major export plants including Golden Pass and Freeport LNG.
MCX commodities update at 9 PM on May 20
| Commodity | Price | Change | % Change |
|---|---|---|---|
| Silver | Rs 2,74,253 | +4,134 | +1.53% |
| Gold | Rs 1,59,920 | +840 | +0.53% |
| Copper | Rs 1,353.15 | +15.60 | +1.17% |
| Zinc | Rs 369.60 | +3.30 | +0.90% |
| Crude Oil | Rs 9,615 | -412 | -4.11% |
| Natural Gas | Rs 291.8 | -7.6 | -2.54% |
| Aluminium | Rs 386.10 | +1.70 | +0.44% |
Analysts said markets will continue to monitor developments in the Middle East conflict, Federal Reserve commentary, bond yield movements, US inventory data and inflation indicators for further direction across commodities.
Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Commodity market investments are subject to market risks and global geopolitical developments.