Commodities weekly: Middle East tensions lift crude and precious metals in Commodity News 23/02/2026 Commodity markets delivered another week of relative resilience, with the Bloomberg Commodity Index rising around 1.7% as geopolitical tensions, supply concerns and resilient demand offset Lunar New Year softness across industrial metals. Overall, the index, which tracks the performance of 25 major commodity futures trades up 9% year-to-date and 15% in the last twelve months. Energy and distillates led gains amid rising Middle East risk premiums, while wheat advanced on weather threats and Black Sea uncertainty. Precious metals consolidated within established ranges, and soft commodities were dragged sharply lower by a continued collapse in cocoa. Meanwhile, macro developments — including cautious Fed messaging and increasingly crowded bearish dollar positioning — add an important cross-asset dimension that may influence commodity performance in the weeks ahead. Macro backdrop: shifting focus from equity volatility to geopolitics and rates Cross-asset attention shifted this week away from AI-driven earnings concerns and the equity volatility that recently triggered broad risk reduction. While commodities were briefly caught in these crosswinds, the sector continues to outperform many financial assets, supported by structural supply constraints, resilient consumption and an increasingly uncertain geopolitical environment. Monetary policy expectations remain an important overlay. Minutes from the latest Federal Open Market Committee meeting reinforced policymakers’ hesitancy toward further rate cuts, reflecting concerns about inflation persistence and financial stability. This cautious tone has helped lift bond yields and intermittently support the US dollar, limiting upside momentum in rate-sensitive assets such as gold. At the same time, dollar sentiment has turned extremely negative according to a survey by Bank of America showing positioning against the dollar at record bearish levels, reflecting expectations of US economic softness and eventual Fed easing. While continued dollar weakness would provide tailwinds for commodities, the crowded nature of the trade increases the risk of sharp short-covering rallies should US data surprise to the upside — a development that could temporarily pressure commodity prices. When crude oil rises on geopolitical stress, the USD often strengthens as a safe‑haven currency. Major alternatives such as the euro, yen and sterling are issued by net energy importers, meaning higher oil prices worsen their trade balances, while the United States’ position as the world’s largest oil producer can support the dollar during supply shocks. This dynamic, combined with Fed hesitancy toward rate cuts, helps explain why the USD gained around 1% on the week while all other major currencies weakened. Energy: geopolitical risk premium returns Energy markets were the week’s dominant driver as crude prices climbed to a six-month high amid rising Middle East tensions. Traders are increasingly worried about the risk that diplomatic efforts fail after Donald Trump warned Iran it has at most 15 days to reach a nuclear agreement. The prospect of supply losses through the Strait of Hormuz, one of the world’s most critical oil transit chokepoints, has prompted significant hedging activity. Options markets reflect this shift in risk perception: more than 344,000 Brent call options traded on Thursday, some 90% above the three mont