Antonina Levashenko, Head of International Best Practices Analysis Department at the Gaidar Institute, commented for “Prometall” on the situation in the commodities market caused by the negotiations between the U.S. and Iran.
The expert explained the reasons behind the sharp spikes in metal prices. According to her, current price dynamics depend on increased volatility in the stock markets amid the crisis in the Middle East, as well as fluctuations in the U.S. dollar, which primarily affect the precious metals market.
“In particular, the crisis in the Middle East has primarily led to a reduction in aluminum supply and, consequently, a rise in its market price. We are seeing a sharp decline in metal supplies from the Middle East (for example, Bahrain has cut production by 19%), which, according to estimates by the Shanghai Futures Exchange, accounted for 9% of global supplies as recently as 2025. “The main factor affecting prices is logistical disruptions from the East—the issue of aluminum shipments has arisen due to the closure of the Strait of Hormuz,” the expert noted, adding that companies are having to seek new routes, which leads to higher freight and insurance costs: “War risk premiums have increased from approximately 0.25% to 3% as a result of the conflict.”
Antonina Levashenko also pointed to the volatility of precious metals due to fluctuations in the dollar and de-dollarization processes: “In particular, over the past few weeks, the silver market has fallen more sharply than in the past few years; over the 20 days of March, the price dropped by 37%, according to the Shanghai Metals Exchange. It should be noted that the silver market often reacts more intensely than the gold market, for example, given that it is a much smaller market and is more closely tied to sectors currently under pressure, such as renewable energy, data centers, and electronics. In addition, gold and silver are significantly affected by the current high volatility of the U.S. dollar, as well as the ongoing process of de-dollarization worldwide, since demand from countries outside the dollar zone is falling because it is becoming more expensive for investors to buy.”
However, the expert emphasized that the current price drop opens up opportunities for investors: “The current decline was followed by a correction and a rise in precious metal prices, which is why it may now be beneficial to buy precious metals amid the price drop.
For example, we can certainly expect an increase in industrial demand for silver due to its use in technology and electronics, as well as the continuing shortage of supply on the global market. Furthermore, if the conflict drags on, gold and silver could once again become ‘safe-haven assets for capital preservation’ amid a general global economic downturn resulting from the energy crisis, which would again boost their market value,” Antonina Levashenko emphasized.