Gold and silver plummeted, crude oil surged—what just happened?

Ask AI · How do Trump’s comments on Iran trigger a split in the commodities market?

On April 2, the commodities market showed a clear pattern of divergence. The precious-metals sector, which had been rebounding for several days, suddenly turned around: gold and silver fell sharply. In contrast, the international crude oil market once again saw an explosive surge, with extreme price volatility.

In the spot market, as of the time of writing, London gold fell 2.97% on the day, to $4,616.809 per ounce. During the session, it briefly peaked at $4,800.46 per ounce, then once again dropped below the $4,600-per-ounce level, with a low of $4,553.158 per ounce. London silver fell even more sharply: down 5.80% on the day, to $70.683 per ounce, at one point slipping below the $70-per-ounce mark.

In futures markets, prices moved down in tandem. As of the time of writing, COMEX gold futures fell 3.54% on the day, to $4,642.9 per ounce. During the session, they reached a high of $4,825.9 per ounce and a low of $4,580.4 per ounce. COMEX silver futures’ decline widened further to 6.62%, to $71.045 per ounce, with a low of $69.66 per ounce.

In contrast, the international crude oil futures market showed an explosive upward trend. As of the reporter’s time of writing, WTI crude oil jumped 7.54% to $107.67 per barrel, reaching a session high of $108.03 per barrel; Brent crude oil futures rose 7.29% to $108.53 per barrel, with a session high of $109.18 per barrel.

Geopolitical developments became the core trigger for the large-scale fluctuations in the commodities market. On the news front, local time on April 1, U.S. President Trump delivered a speech in Washington, claiming that the Iran conflict had achieved a “quick, decisive, overwhelming victory.” Trump said the U.S.’s core strategic objective in the Iran conflict was “nearly completed,” and that all military objectives could be achieved “within a very short time.” “In the next two to three weeks, we will launch an extremely fierce attack on them… and negotiations are also underway.”

“After Trump’s comments were released, the market once again became concerned about an escalation in the Iran war, triggering large swings in commodities prices,” Leng Yudong of the Investment Consulting Department at Zhongtian Futures said. “The recent volatility in oil prices has constrained the pace of gains in precious metals, and the two are showing inverse movements. When geopolitical tensions are high, oil rises, the U.S. dollar rises, and gold falls; conversely, when geopolitical tensions ease, oil falls, the dollar slips, and gold rebounds. The fundamental logic is that capital is worried about global future inflation expectations.”

“Going forward in the near term, oil prices will most likely continue to maintain the characteristic of high-level volatility,” Leng Yudong said. “Based on historical experience, the impact of geopolitics on oil prices tends to be more short-term, but we also need to watch whether Middle East energy infrastructure will suffer even greater damage in the future. If the situation in the Middle East worsens further, it is still not ruled out that oil could rise further, thereby continuing to suppress the overall trend in precious metals.”

In the gold market, Xia Yingying, head of the precious-metals and new-energy research group at Nanhua Futures, said that looking into the second quarter, three key variables—how the situation in the Middle East evolves, the Fed’s policy, and supply-and-demand fundamentals—are intertwined, and they will jointly continue to determine the rhythm of the precious-metals market. However, at the margin, the impact driven by geopolitical events is expected to gradually weaken, and prices may return to being led again by drivers such as monetary-policy adjustments and fundamentals.

From the perspective of supply-and-demand fundamentals, Xia Yingying further analyzed that for gold, the long-term trend of central bank gold purchases has not changed, which helps build a solid base for support. But in the short term, outflows of investment demand have created a stage-wise suppression, and going forward it will be important to watch whether the pace of central bank gold purchases will accelerate. For silver, its high volatility is constrained by dual factors: traditional industrial demand and inventory adjustments. Two additional factors also need special attention: first, new industrial demand such as new energy and AI computing power; second, shifting deliveries and inventory ahead of delivery months, as well as pressure from delivery squeeze.

“Rational investing is never just a slogan—it is also a survival rule in the world of investing,” Leng Yudong emphasized. “At present, a shared characteristic of oil and gold is that both are at relatively high levels. Overall, the products show characteristics of large price fluctuations at high levels, which undoubtedly increases the difficulty of investing. It is difficult to trade with one-sided strategies, and requirements for capital management are also more stringent. Given the current market’s volatility characteristics, we recommend that investors may appropriately adopt a volatility-based strategy, stay rational and objective with a clear mind, strictly control position sizes, treat trading from an investment perspective, avoid short-term speculation, and prepare risk contingency plans.”

Reporter Lu Yiw en

Text Editor Chen Si