The Federal Reserve’s prolonged pause in cutting interest rates, along with a strong U.S. dollar and a high-interest-rate environment, continues to weigh on the entire commodities market.

$CL
Crude oil is currently trapped in a “double squeeze from both supply and demand.”
Supply side: The negotiations for a ceasefire between the U.S. and Iran have eased geopolitical tensions, and the Strait of Hormuz has resumed navigation. After the ceasefire news broke, the U.S. benchmark crude oil price had already fallen sharply by about 14%.
Demand side: Even worse—the International Energy Agency (IEA) has revised its 2026 global oil demand forecast from last month’s projected increase of 730,000 barrels per day, directly down to a contraction of 80,000 barrels per day. It expects the year-over-year decline in the second quarter to be as large as 1.5 million barrels per day. Goldman expects that by the end of this year, Brent crude oil could fall to $60 per barrel, while WTI could be seen at $56 per barrel.
$XAU
Gold is currently in a very awkward situation.
Geopolitical conflicts should, in theory, be good for gold, but rising oil prices have lifted inflation expectations, which has instead forced the Federal Reserve to delay rate cuts—turning it into a negative factor. After the March policy meeting, the Fed’s dot plot showed that there will be only one rate cut for the whole of 2026, and as many as 7 officials believed rate cuts should not be done at all. The situation in the funding market is even worse: in March, commodity ETFs suffered about a record $11 billion in outflows, and gold ETFs alone saw outflows of more than $7 billion.
$XAG
Silver is like an “amplifier” for gold.
Its industrial attributes make silver more afraid of a slowdown in global growth than gold is. With oil prices currently high and also weighing on global demand expectations, silver’s industrial attributes create a clear drag, making it hard for silver to fully replicate gold’s safe-haven logic. In addition, silver positions are more crowded than gold’s; once take-profit is triggered or positions are passively reduced, silver’s drop typically exceeds that of gold.
Rising oil prices have boosted inflation expectations, forcing the Federal Reserve to maintain high interest rates, and the strong dollar, in turn, has suppressed all U.S.-dollar-denominated commodities. Market expectations for rate cuts have shifted from “when will they come” to “whether they will come at all.”