Gold and oil diverge in their trends; the commodities market shows structural differentiation

In recent times, the cloud of geopolitical tension in the Middle East has continued to hang over global commodities markets, and the futures market has seen an unusually divergent pattern: one side is the surge in the energy and chemical sector—US WTI crude oil futures briefly broke through the $100 per barrel threshold, and domestic futures such as fuel oil, methanol, and propylene have triggered wave after wave of daily limit-up moves; the other side is falling precious metals prices—Shanghai Gold futures’ main contract fell below the 1000 yuan/gram level, almost giving back all of the gains made so far this year. Industry participants believe that this divergence between gold and oil prices is not simply the result of “geopolitical risk hedging pricing,” but rather the combined effect of supply shocks and the re-pricing of financial conditions. Inflation and interest-rate logic have replaced the traditional risk-hedging logic, with expectations for Federal Reserve policy becoming the dominant variable. This kind of extreme divergence not only disrupts the logic of traditional asset allocation, but also brings many uncertainties to the market. (China Securities Journal)