This week, global commodity markets experienced significant volatility, with pronounced divergence across different sectors. Driven by the evolving situation in the Middle East, expectations for continued tightening of the US Federal Reserve's monetary policy, and periodic adjustments in global supply and demand dynamics, prices of key commodities—including energy, precious metals, agricultural products, and new energy materials—swung sharply. Market sentiment remained highly sensitive, leading to a noticeable acceleration in trading activity.

Crude oil futures saw heightened price swings, primarily due to a rapid erosion of geopolitical risk premiums as expectations grew for a potential easing of tensions. Signals from the U.S. President regarding talks with Iran alleviated market fears of disruptions to shipping through the Strait of Hormuz. Concurrently, the Federal Reserve's hawkish stance strengthened the U.S. dollar, further dampening demand for dollar-denominated crude. Adding to the pressure, domestic refineries entered their traditional maintenance season, resulting in weaker downstream processing demand and intensifying concerns over consumption. Although OPEC+ production cuts continued to provide a floor for prices, profit-taking by previous long positions and new short entries amplified price fluctuations. Currently, oil prices are caught in a pattern of high-level volatility, with future trends heavily dependent on potential flare-ups in geopolitical tensions, shifts in the Fed's policy path, and the pace of refinery restarts worldwide.

Precious metals witnessed a period of high volatility, influenced by both sentiment and policy. Early in the week, while escalating geopolitical risks would typically boost gold's safe-haven appeal, the Fed's signal that rates would remain higher for longer increased the premium on dollar liquidity, drawing capital into dollar-denominated assets and triggering a sell-off in gold. However, as geopolitical tensions showed signs of rapid de-escalation and market worries about rising inflation eased, expectations for Fed rate hikes moderated marginally, allowing gold prices to rebound. Yet, this recovery lacked solid footing, as lingering uncertainty over the Middle East situation led to continued back-and-forth price action. Structurally, the long-term rationale for central banks' ongoing gold purchases remains intact, underpinned by strategic needs for de-dollarization and diversification of foreign exchange reserves.

Within the agricultural sector, soybean futures retreated from recent highs. On one hand, anticipation of a ceasefire in the Middle East weighed on crude oil prices, indirectly weakening demand support for U.S. soybeans from the biofuel sector. On the other hand, expectations for a bumper Brazilian soybean crop in the 2025/26 season are gradually materializing, with forecasts pointing to a record-high output in South America, putting noticeable pressure on far-month contracts. Domestically, although temporary support came from lower oilseed crushing volumes and farmers' reluctance to sell, downstream feed manufacturers have turned cautious in their purchasing—opting mainly for essential restocking—ahead of the anticipated arrival of large South American soybean shipments between April and May. With no new catalysts ahead of the USDA's planting intentions report, futures prices pulled back from their peaks.

In the new energy materials space, lithium carbonate futures strengthened once again, driving a collective uptick in the lithium battery sector. The entire supply chain is showing signs of synchronized recovery. Despite an expected significant 28% month-on-month increase in lithium carbonate production to 106,000 tonnes in March, indicating a clear rebound in output, downstream production of ternary materials and lithium iron phosphate batteries has also risen in tandem. Demand for energy storage remains robust, and battery cell production schedules continue to run at high levels. The renewed strength in lithium carbonate futures has reinforced market expectations for raw material tightness and rising battery costs, leading to a broad rally in lithium mining and battery-related stocks and highlighting a clear stock-futures linkage effect.