Commodities Report: Gold pauses above USD 5000 as energy shock clouds the global outlook – Insights from Saxo Bank

Gold has traded sideways above USD 5,000 despite rising geopolitical tensions and a major disruption to Persian Gulf energy supplies that has driven sharp increases in oil, gas, and related commodities. The market’s muted response reflects gold’s role as a highly liquid asset often sold to meet margin calls or rebalance portfolios during stress, alongside rising real yields and a firmer US dollar that have reduced the near-term appeal of non-yielding assets. While higher commodity prices raise inflation risks, the current shock is largely supply-driven, which tends to act as a tax on growth rather than an overheating signal, potentially weakening activity in energy-intensive economies and forcing a difficult policy trade-off for the Fed that could make anticipated rate cuts more likely if growth falters.

Structurally, the long-term drivers for gold remain intact or strengthened: ongoing geopolitical risk, persistent fiscal deficits (notably in the US), and central-bank diversification away from currencies continue to support demand, even if reserve buying may moderate as allocations rise. Saxo maintains a constructive outlook for precious metals, expecting potential gold upside toward USD 6,000 and silver toward USD 100 in the coming quarters, though very high prices could eventually curb industrial demand and boost supply from recycling.