US-Iran Deal: Crude May Remain Range-Bound, Gold Rally To Resume After Oct

Chennai: The announcement of a U.S.-Iran peace deal has eased concerns over supply disruptions in the Middle East, triggering a nearly 4 per cent decline in crude oil prices. However, while oil markets have shed a significant portion of their geopolitical risk premium, commodities ranging from precious metals to agricultural products could remain supported by structural supply and demand factors.

Before the conflict escalated, Brent crude was trading at around $60-65 a barrel before surging to nearly $120. While prices have corrected sharply following the ceasefire announcement, Kedia expects Brent crude to remain in a broad range of $76-77 on the downside and $100-105 on the upside. If sanctions on Iran are eased and the Strait of Hormuz remains fully operational, Brent could average $75-78 a barrel in the coming months.

"It is too early to conclude that the geopolitical risk premium has completely vanished from oil markets. Although the ceasefire has reduced fears of prolonged disruption, damaged energy infrastructure across the region will take time to restore, keeping crude prices volatile and largely news-driven in the near term," said Ajay Kedia, Managing Director of Kedia Commodities.

Iran's return to global oil markets could further ease supply concerns. The country is estimated to have 140-170 million barrels of crude in floating storage and could increase production by 500,000-700,000 barrels per day within three to six months. For India, however, Kedia expects only a gradual shift in sourcing patterns, with refiners continuing to benefit from discounted crude from both Russia and Iran.

While lower energy costs may put some pressure on industrial metals, Kedia remains constructive on the sector. Aluminium prices, which surged due to rising energy costs during the conflict, could see a temporary pullback. However, demand fundamentals remain strong. Among base metals, he is particularly bullish on copper, followed by aluminium and zinc. Copper demand continues to be driven by investments in artificial intelligence, semiconductor manufacturing and data centres, while supply disruptions in major producing countries are providing additional support.

On precious metals, Kedia expects gold and silver to remain under pressure in the short term despite their traditional safe-haven appeal. Profit-booking, rising U.S. inflation and the possibility of higher interest rates could keep prices in a consolidation phase over the next few months. However, he remains firmly bullish on their long-term prospects, citing the growing trend of de-dollarisation and increased demand for gold as an alternative reserve asset. According to Kedia, a fresh rally in gold and silver could begin after October if peace in the region is sustained.

Agricultural commodities are also expected to remain firm. Disruptions in fertiliser supply chains during the conflict boosted prices of fertiliser-intensive crops such as corn, wheat and oilseeds. While lower energy and fertiliser costs may provide some near-term relief, weather risks, including the possibility of a strong El Niño event, along with inventory rebuilding and supply concerns, are likely to support agricultural commodity prices over the next six to twelve months.

Kedia also believes commodity markets are undergoing a structural shift, with growing participation from institutional investors, family offices and alternative investment funds. Combined with geopolitical uncertainties and climate-related disruptions, this trend could result in greater volatility and stronger price trends across commodity markets in the years ahead.