Samvat 2082: Commodities witness sharp volatility as crude surges

Commodities saw a year of sharp swings in Samvat 2082, with crude oil emerging as a major gainer amid the US-Iran conflict. Gold and silver, on the other hand, surrendered a substantial part of their record-breaking rallies. Rising geopolitical tensions, supply disruption concerns and shifting interest rate expectations drove volatility across all three assets.

Brent crude spot prices surged 60.4 per cent during the Samvat to $97.7 a barrel on Friday evening. Gold and silver declined 6.6 per cent and 0.8 per cent, respectively, in dollar terms. However, domestic investors saw positive returns in precious metals, with gold gaining 10.8 per cent to ₹140,886 (around ₹1.4 lakh) per 10 grams and silver rising 12.2 per cent to ₹182,868 (around ₹1.82 lakh) per kg.

These gains were supported by the depreciation of the rupee. Crude oil prices had a relatively subdued start to the Samvat before rallying sharply following the escalation of the US-Iran conflict on February 28. During the year, Brent crude spot prices closed at a high of $113.6 a barrel on May 4.

Also Read Meanwhile, gold and silver began the Samvat on an upward trajectory, supported by expectations of lower US interest rates. They touched closing highs of $5,417.2 and $116.7 an ounce, respectively, on January 28. Gold ended the Samvat at $4,070 an ounce, nearly 25 per cent below its January peak.

Silver suffered a steeper correction, closing at $52 an ounce, more than 55 per cent below its record closing high. “The year gone by has been particularly volatile for commodities. At the start of Samvat, gold and silver were on an upward trajectory, supported by expectations of lower US interest rates.

However, as crude oil prices surged following escalation of the US-Iran conflict, both precious metals came under pressure,” said Anindya Banerjee, head of commodity and currency research at Kotak Neo. Banerjee added that higher oil prices and the resulting inflationary pressures had contributed to an interest rate hike cycle in the US and India, weighing on precious metals.

Narvekar also said that during the volatile year, gold and silver surged into January, with geopolitical tensions, higher oil prices, inflationary concerns, Fed rate hikes, higher yields and a firm dollar then reversing the move. Despite the correction in international prices, domestic gold and silver returns remained positive.

A weaker rupee and import duties cushioned Indian investors. Central bank purchases and exchange-traded fund (ETF) inflows also kept dips shallow, Narvekar added.