During the Spring Festival holiday, precious metals and crude oil prices surged strongly. Industry experts warn to be cautious of potential market volatility in the future.

During the Year of the Horse Spring Festival holiday, the global commodities markets showed divergence, with overall characteristics of precious metals leading the gains and energy sectors remaining strong. Notably, NYMEX silver futures, gold futures, Brent crude oil futures, and WTI crude oil futures experienced significant increases, becoming market focal points. Other categories such as industrial metals showed mixed performance.

Industry insiders stated that geopolitical tensions between Iran and the U.S., U.S. tariff policy decisions, and other events influenced the price movements of precious metals and crude oil. Tight silver inventories and other fundamental factors also supported their rise. Looking ahead, due to uncertainties in supply, seasonal demand fluctuations, and macroeconomic disruptions, commodity price volatility is likely to intensify. Precious metals and crude oil will remain core volatile assets, and related risks should be closely monitored.

Bright Performance in the Precious Metals Sector

According to Zhengxin Futures, during the Year of the Horse Spring Festival holiday (from 3:00 PM on February 13 to 3:00 PM on February 23, Beijing time), the precious metals sector performed remarkably. COMEX silver futures rose over 11%, ranking first among major global commodities; COMEX gold futures increased over 3%, continuing the upward trend.

Nanhua Futures noted that during the holiday, geopolitical conflicts between Iran and the U.S. caused price fluctuations in the precious metals market. Earlier, Iran’s foreign minister stated that Iran and the U.S. reached consensus on negotiation “guiding principles,” which led to a decline in oil prices and adjustments in precious metals prices. Subsequently, both oil and precious metals prices surged together, with geopolitical risk being the primary driver of this round of gold price increases.

Yide Futures precious metals analyst Zhang Chen said that during the holiday, the most impactful event was the U.S. Supreme Court ruling that the large-scale tariffs imposed by the Trump administration were unlawful. On one hand, if some tariffs are lifted, the likelihood of easing U.S. inflation would increase. Falling inflation expectations combined with rising market risk appetite would push nominal interest rates higher, which could put short-term pressure on precious metals prices. On the other hand, this ruling did not fundamentally alter the current U.S. tariff policy. Moreover, the ruling is not final, and future policy changes and uncertainties in judicial decisions could provide medium-term support for precious metals prices.

Regarding silver, Zhang Chen stated that from a fundamental perspective, global silver inventories remain tight. After the holiday, the upcoming March delivery month on COMEX will be a key test. Currently, registered silver futures warehouse receipts on COMEX are decreasing, and considering visible inventories in London and Shanghai, there is a high probability that silver prices will rise again during the delivery month, potentially leading other precious metals to a secondary peak.

Strong Rebound in International Oil Prices

International crude oil markets also experienced a strong rebound during the holiday, with Brent crude and WTI futures both rising sharply.

According to Zhengxin Futures, during the holiday, Brent crude futures increased over 5%, and WTI futures rose more than 4%.

Nanhua Futures indicated that in the short term, the core of international oil pricing remains the Middle East geopolitical risk premium. The development of Iran-U.S. issues continues to determine market trends. Additionally, during the holiday, U.S. EIA crude inventory data unexpectedly decreased, providing some support to prices.

Besides precious metals and oil, other commodities showed mixed performance. For example, in industrial metals, data shows that during the holiday, three-month LME aluminum, nickel, and copper prices rose slightly, while tin prices declined slightly.

Potential for Increased Price Volatility

Looking ahead, in the medium to long term, Nanhua Futures highlighted several key issues in the oil market: On the supply side, while OPEC+ continues to maintain a pause on production increases through March, the restart of production in April remains uncertain. Additionally, production increases from non-OPEC countries such as the U.S., Guyana, and Argentina will be critical for market balance. On the demand side, seasonal patterns indicate that from March to April, global refineries will enter their traditional maintenance season, potentially causing demand to contract temporarily. Monitoring maintenance scale and progress is essential. Currently, refinery maintenance remains low. On the inventory side, ongoing tracking of key inventory data is necessary to assess the pace of market rebalancing. Therefore, in the short term, oil prices are expected to remain volatile under the influence of Middle East geopolitical risks and macroeconomic disruptions.

For precious metals, Zhengxin Futures stated that the current market uncertainty is high, and caution should be exercised to avoid risks from sharp price swings. In the medium to long term, under the backdrop of geopolitical tensions, central bank gold purchases, and rising ETF investments, the bullish case for gold is more solid than for silver. Investors are advised to reduce positions on rallies and add on dips. Silver, being more sensitive to news and capital flows, is more volatile; strategies such as buying on sharp declines or after effective breakouts are recommended.

(Source: China Securities Journal)