Iran’s threat to drive oil prices up to $200 a barrel may sound like hyperbole, but as the energy crisis persisted, that outcome already looked more likely than US President Trump’s prediction that oil prices would soon pull back to pre-war levels… The conflict involving Israel and the US against Iran entered its third week — and escalated into one spanning the entire Middle East — yet the global oil benchmark’s response so far was surprisingly “mediocre.” Brent crude oil was currently trading near $100 a barrel, up about 65 from the start of the year. Although that level would have been unimaginable just a few weeks ago, it still remained below last Monday’s brief peak of nearly $120. Given that since the conflict began, the effective closure of the Strait of Hormuz had trapped about one-fifth of global oil supply — roughly 20 million barrels a day — crude oil prices should, in theory, have been much higher. That seemed to suggest investors still retained a degree of trust in Trump , betting that the crisis would be resolved quickly and that the Strait of Hormuz would soon reopen — whether it was called the “Trump put,” the “TACO trade,” or “buy Trump,” many oil traders appeared to be wagering that the president would ultimately be able to limit the market damage. “When this is over, oil prices will come down very, very quickly,” Trump said on Monday this week. Yet that optimism looked increasingly difficult to reconcile with realities on the ground — whether on a battlefield where the conflict was intensifying, or in the physical oil market, where supply bottlenecks were steadily spreading. Signals Being Overlooked In fact, the physical crude oil market was sending an increasing number of stress signals, even though the international benchmark “paper oil” market had so far largely ignored them. Although trade had stalled under the impact of the Iran conflict, Middle Eastern crude benchmarks still surged to record highs, making them the most expensive crude in the world. The spike in these benchmark indicators, which are used to price millions of barrels of Middle Eastern crude sold to Asia, was raising costs for Asian refiners and forcing them to seek alternatives or make further production cuts in the coming months. S&P Global Platts said Dubai spot crude assessments for May-loading cargoes hit a record $157.66 a barrel on Tuesday, surpassing the previous all-time high of $147.5 set by Brent crude oil futures in 2008. That left Dubai crude’s premium to swaps at $60.82 a barrel, compared with an average premium of just 90¢ in February. Meanwhile, Oman crude oil futures hit a record high of $152.58 per barrel on Tuesday, with its premium to the Dubai swap set at $55.74 per barrel, versus an average premium of just 75¢ in February. Oman crude oil is exported from a terminal outside the Strait of Hormuz. This surge reflected massive uncertainty over actually available supply in the Middle East after Iran repeatedly attacked Oman's oil terminal and the UAE's major oil export terminal of Fujairah outside the Strait of Hormuz. Are Brent and WTI Failing to Reflect the "True Severity" of the Oil Market? As JPMorgan's head of commodities, Natasha Kaneva, pointed out in her latest research note on Tuesday , there was a clear mismatch between international benchmark crude pricing and the Middle Eastern geography of the supply disruptions. The core issue was that Brent and WTI are benchmark indicators at opposite ends of the Atlantic basin, while the current shock is concentrated in the Middle East. As a result, these benchmark crude prices were particularly influenced by relatively loose regional fundamentals—commercial oil inventory in both the US and Europe were ample in early 2026, and supply across the Atlantic basin was also relatively abundant in the short term. In addition, expectations for a release from the US Strategic Petroleum Reserve (SPR)—as well as a partial release that will soon materialize—further eased prompt tightness in Brent- and WTI-linked markets. By contrast, Middle Eastern crude benchmarks such as Dubai and Oman more accurately reflected the current dislocation in the physical market. Dubai and Oman spot prices were both trading above $150 per barrel, underscoring the severity of crude oil shortages originating in the Gulf region. These Middle Eastern oil prices were directly affected by export disruptions and therefore more effectively reflected marginal supply deficits than Atlantic-linked crude prices. Crucially, trade geography intensified this dynamic. Most of the crude transported via the Strait of Hormuz goes to Asia—before the outbreak of the Middle East conflict, about 11.2 million barrels of crude and 1.4 million barrels of refined products flowed through the strait to Asia each day. As a result, the direct physical shortage—and the surge in oil prices—was concentrated in Asian markets most dependent on Gulf crude. In fact, early signs of demand destruction had already emerged in Asia as product prices surged and spot crude became prohibitively expensive. JPMorgan noted that timing effects further reinforced this divergence. A typical voyage from Gulf Cooperation Council (GCC) countries to Asia takes about 10 to 15 days, while cargoes bound for Europe via the Suez Canal require nearly 25 to 30 days, or 35 to 45 days if rerouted around the Cape of Good Hope. Therefore, the impact of disrupted Gulf flows would hit Asian markets sooner and more severely, while Atlantic Basin benchmarks such as Brent and WTI would enjoy a longer buffer because of surplus inventory and slower supply adjustments. The US, with crude oil production exceeding 13 million barrels per day, would be affected the least. JPMorgan believed that, in this context, the apparent price stability shown by Brent and WTI should not be taken as evidence of adequate global supply. It reflected a temporary buffer created by regional surplus inventory, benchmark composition, and policy intervention. In fact, for refiners, especially those in Asia, the current crude oil shortage had already become a serious problem. About 60% of the region’s crude oil imports depended on the Middle East, and the difficulty of finding alternative, timely supplies was rapidly becoming acute. The pressure had already forced many countries into painful adjustments. Refiners across Asia had begun cutting run rates to conserve dwindling inventory. Some countries had banned exports of refined products, a defensive move that could further tighten the global market. As the crude oil shortage worsened, refined product prices surged. Asian jet fuel prices were approaching $200 a barrel, near the record high of about $220 reached earlier this month. The Crisis Could Spread Further Ultimately, this crisis was expected to extend beyond Asia. Data from analytics firm Kpler showed that Europe accounted for about three-quarters of Middle Eastern jet fuel exports shipped through the Strait of Hormuz last year—about 379,000 barrels per day—but since the conflict began, no such cargoes had passed through the strait. Unsurprisingly, jet fuel barge prices in the Amsterdam-Rotterdam-Antwerp refining hub had surged to a record $190 a barrel, exceeding the previous peak set after the Russia-Ukraine conflict in February 2022. The comparison with the Russia-Ukraine crisis may be even more compelling. Before the outbreak of the Russia-Ukraine conflict in 2022, Russia supplied about 30% of Europe’s crude oil imports and one-third of its refined product imports. As traders feared Europe would lose supplies from one of the world’s largest oil producers, Brent crude rose to $130 a barrel after the Russia-Ukraine conflict—even though that worst-case scenario never fully materialized in the end. By contrast, according to Morgan Stanley, the physical disruption caused by the Iran conflict had already exceeded that level of concern by more than threefold. Even if the Strait of Hormuz were to reopen immediately, it would not bring immediate relief. According to the International Energy Agency, about 10 million barrels per day of production in the Middle East has been shut in since the conflict began. Restoring these flows will take weeks, if not months. To be sure, the oil market entered the Iran conflict in a relatively loose state, and the International Energy Agency had projected that global supply would exceed demand by about 3.7 million barrels per day. But that surplus has now been erased by the current turmoil. Last week, the International Energy Agency announced plans to release a record 400 million barrels from member countries' strategic petroleum reserves, which will help cushion the initial shock. But drawing down inventories cannot substitute for deliveries of new oil. In other words, the supply shock to the oil market is real and may persist. Once the Strait of Hormuz finally reopens, oil prices could initially plunge in a relief rebound, but given the harsh realities of the physical market, traders may need to think twice before betting that the return to normalcy promised by Trump is about to arrive…

Geopolitical tensions, and concerns about fiscal policy and central banks, have driven the gold price to where it is today.

Silver is having one of its most extraordinary years in modern market history.

JPMorgan published a research report stating that BYD (01211.HK) recently launched the second-generation blade battery and announced the expansion of its fast-charging network. Meanwhile, its various brands jointly introduced 10 new all-electric/plug-in hybrid car models, with deliveries expected to begin in April or May. The bank believed that BYD’s sales would rebound quarter-on-quarter from about 700,000 units in the first quarter of this year to 1.1 million to 1.2 million units in the second quarter. The bank believed that investors’ next focus would be on the rebound in store foot traffic around the Beijing auto show on April 24. The bank maintained its target price at HK$110 and its rating at “Overweight”.

[SMM Tin Morning Brief: Macro Sentiment and Spot Trades in a Tug-of-War; Tin Prices Retreat After Rapid Rise and Enter Consolidation]

Feb 25 (Reuters) - JP Morgan raised its long-term forecast for gold prices to $4,500 an ounce on Wednesday while keeping its 2026 year-end forecast at $6,300.

Key Points: Silver extends its breakout above the 50-day MA as bullish momentum builds toward the February high of $92.20. A 31% drop in COMEX inventories fuels concerns over a growing physical supply crunch. Registered silver stocks fall below 90M oz, raising liquidity fears as open interest exceeds available metal fourfold.

JPMorgan predicts a roughly 130,000 tonne copper supply deficit in 2026, with scrap supply growth helping but not fully offsetting overall tightness.

As the conflict between Israel and Iran continues to escalate, oil industry executives from companies such as ExxonMobil, TotalEnergies, and Shell issued warnings on Tuesday. They stated that further attacks on critical energy infrastructure could have severe consequences for global energy supply and prices.

At 2:00 AM Beijing time on Thursday, the US Fed will announce its interest rate decision and the latest Summary of Economic Projections (SEP), followed by a press conference by Fed Chairman Powell at 2:30 AM. The market generally expects the Federal Open Market Committee (FOMC) to maintain interest rates unchanged at 4.25%-4.5%. A recent Reuters survey showed that 103 out of 105 economists surveyed expected rates to remain unchanged, while 2 expected a 25-basis-point interest rate cut. In the same survey, among the 105 economists, 59 predicted that the US Fed would resume interest rate cuts in the next quarter (possibly in September), while 60% of economists expected two interest rate cuts this year, consistent with the median dot plot in March and relatively aligned with money market pricing, which anticipates a 46-basis-point easing by the end of the year. Newsquawk noted in its outlook that, given the ongoing uncertainty about the economic impact of Trump's tariff policies, the US Fed may continue to adopt a "wait-and-see" approach and closely monitor the latest SEP, which will be released alongside the interest rate decision; among which, the 2025 dot plot will be a key focus, currently indicating a 50-basis-point interest rate cut this year. As repeatedly emphasized by the vast majority of committee members this year, the clear message is that there is currently no obvious need for immediate policy adjustments, and adopting a patient approach is the best choice. Future data releases will ultimately bridge the divergent views on inflation and growth/employment. Therefore, as Jefferies Group pointed out, "waiting and seeing" is better than "pre-emptive action." Recent data have shown strong job growth and some easing of inflation, although tariff risks remain a concern, while the market is now also paying extra attention to the potential inflationary impact of the Israel-Iran conflict. Future data releases will be crucial for policy formulation . Policy Statement Officials may no longer say that uncertainty has "further increased," but will simply state that it "remains elevated." Regarding the June FOMC statement, Morgan Stanley believes that, given the high degree of uncertainty and the risks on both sides of the Fed's mandate, the most likely outcome is minimal changes in wording. The statement may still mention the ambiguous impact of net export fluctuations on overall GDP data signals. April's trade data showed a significant reversal in imports due to the reversal of some "front-loading" purchasing behavior. The US Fed will continue to draw signals from final sales to domestic purchasers (GDP minus trade and inventory) and final sales to domestic private purchasers (final sales to domestic purchasers minus government spending). Recently, inflation data have generally fallen short of expectations, which implies that there is a risk for committee members to revise the phrase "inflation remains elevated." In recent months, the YoY change rates for both headline and core inflation have declined slightly, consistent with further inflation declines prior to the tariffs. However, Morgan Stanley believes that the anticipated tariff effects, combined with geopolitical risks in the Middle East and soaring oil prices, may keep the Fed's assessment of inflation unchanged. Morgan Stanley believes that the Fed has not yet reached a consensus on this matter ; if so, the key message in the statement will be that "uncertainty remains high." Summary of Economic Projections The Fed's meeting statement and Powell's remarks at the post-meeting press conference are expected to reiterate a wait-and-see stance, but the latest interest rate dot plot will directly reveal the FOMC's expectations for the number of interest rate cuts this year and beyond. UBS forecasts that Powell may emphasize the uncertainty of the economic outlook at the press conference, and even downplay the guidance role of the interest rate dot plot. However, UBS believes that the tone of this meeting will be relatively hawkish —the robust performance of non-farm payrolls data in May is sufficient to support the Fed in maintaining interest rates unchanged, and the duration of high interest rates may be longer than expected in March. Therefore, UBS expects the median interest rate for 2025 and 2026 to be raised. In addition, the June Summary of Economic Projections will more fully consider the impact of reciprocal tariffs compared to March, which may lead to further increases in inflation and unemployment rate expectations. Citi maintains its previous judgment, believing that the median of the dot plot will still show two interest rate cuts this year (each of 25 basis points). Goldman Sachs' economic model indicates that the effective tariff rate will ultimately rise by 14% , with over 9% coming from tariff measures already in effect and the remainder stemming from anticipated industry-specific or key imported goods tariffs to be implemented subsequently. Based on this assumption, and combined with the current limited policy transmission data, Goldman Sachs forecasts that core Personal Consumption Expenditures (PCE) inflation will rebound to a peak of 3.4%. More severely, reciprocal tariffs may lead to a nearly 1% decline in GDP growth this year by suppressing consumer spending and exacerbating uncertainty in corporate investment. If combined with the chain reactions of fiscal and immigration policy adjustments, the YoY GDP growth rate in Q4 2025 may slow down to 1.25% (below potential levels), with the unemployment rate rising by 0.2 percentage points to 4.4%. Therefore, Goldman Sachs expects the US Fed to slightly lower its GDP growth forecast for 2025 to 1.5%, while raising its unemployment rate forecast for the same year to 4.5%. On inflation, the overall and core PCE inflation rates for 2025 may be revised to 3.0% and 2.3%, respectively. These adjustments reflect that, despite the moderate performance of recent economic growth, labour market, and inflation data, the upward pressure on tariff rates has significantly widened compared to the March meeting. Dot Plot Goldman Sachs anticipates that the US Fed will adopt a conservative stance on the dot plot. Although the median dot may indicate two interest rate cuts to 3.875% in 2025 and another two cuts to 3.375% in 2026, the voting distribution for 2025 is expected to be extremely tight —10 officials support two rate cuts, while the other nine lean towards only one cut or no cut at all. The bank also forecasts that the average interest rate expectations for 2025 and 2026 will be slightly revised upwards, as some officials may delay or cancel their interest rate cut plans for this year. Michael Feroli of JPMorgan Chase pointed out that, since the release of the March Summary of Economic Projections (SEP), changes in trade policy have forced the US Fed to significantly adjust its economic outlook, as evidenced by the subtle changes in the wording of the May FOMC statement. JPMorgan Chase expects that, while the "stagflationary adjustment" does not explicitly guide the direction of the dot plot, the bank still believes that the overall tone will lean towards hawkishness —especially after Powell emphasized the priority of price stability at the May press conference, most members of the Committee may have shifted in tandem. JPMorgan Chase forecasts that interest rates will approach neutral levels by the end of 2027, while the median long-term neutral interest rate may be revised upwards by 0.125% to 3.125%. First Interest Rate Cut: December as the Last Line of Defense? Despite widespread market bets on an interest rate cut starting in September, Goldman Sachs maintains that the FOMC will conduct its first interest rate cut in December, followed by two more cuts in 2026 to a terminal rate of 3.5%-3.75%. Its rationale is that, apart from tariffs, recent inflation data have actually been weak—expected wage growth from surveys has fallen to 3.0%, and alternative indicators such as the increase in rents for new tenants have also pulled back to 2.0%, all suggesting that core PCE inflation may fall below 2.0%. However, the peak impact of summer tariffs on inflation coincides with the Fed's decision-making window, making action before December unlikely. It is worth noting that Goldman Sachs recently lowered its probability of a recession within 12 months from a brief spike of 50% in early April to 30%, which is still double the historical average. After risk adjustment, the bank's probability-weighted interest rate forecast is broadly in line with market pricing, suggesting that current interest rate cut expectations have already fully priced in the potential risks of economic deterioration. Technical Analysis of Gold FXStreet analyst Dhwani Mehta stated that from a technical perspective, the bullish bias in gold prices remains intact as the 14-day Relative Strength Index (RSI) stays above the 50 midline, currently near 55. Gold prices have also successfully held above the previous strong resistance level (now turned support) of $3,377, which is the 23.6% Fibonacci retracement level of the record-breaking rally in April. If the outcome of the US Fed meeting is interpreted as hawkish, gold prices will need to find a firm foothold below the aforementioned support level. Once 3,350 , the psychological resistance level in US dollars, is breached, the next downside cushion will point to the 21-day Simple Moving Average (SMA) at 3,341 US dollars. Further downside will test the 50-day SMA at 3,308 US dollars. To sustain a higher move, gold prices must effectively break through the static resistance level at 3,440 US dollars. The next upside target is at the two-month high of 3,453 US dollars, and a break above this could challenge the all-time high of 3,500 US dollars.