How Iran Conflict Impacts Commodities

While US-Iran negotiations cause near-term volatility in oil and gold, low inventories and structural demand for industrial metals support a positive medium-term outlook for commodities as portfolio diversifiers.

Key Takeaways

• 1.Commodity volatility is expected to remain high due to US-Iran negotiations and geopolitical tensions, with Brent crude recently trading near USD 105/bbl.
• 2.Despite fading geopolitical risk premiums, commodity fundamentals remain supportive due to low oil product inventories and structural demand for metals like copper and aluminum.
• 3.Commodities serve as a valuable portfolio diversifier and hedge against inflation and energy supply shocks, especially via active management.

Table of Contents

• Key message
• 01 Volatility in commodities is likely to stay elevated in the near term.
• 02 The geopolitical risk premium should fade, but fundamentals look supportive.
• 03 We continue to favor commodities, with a focus on active management.
• New this week
• One liner
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• Investment view
• Non-Traditional Assets
• Risk information
• Generic investment research – Risk information

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