A new era of geopolitical risk is rewiring global commodity markets

Core Insights - Investors are navigating a new era of geopolitical risk that is increasingly influencing commodity markets, with ongoing conflicts reshaping pricing mechanisms [1][2][4] Group 1: Geopolitical Risk and Commodity Pricing - Geopolitical risk is now a persistent factor in commodity pricing, embedding a risk premium due to supply-chain fragility and trade fragmentation [2][3] - The invasion of Ukraine in 2022 marked the beginning of this new era, leading to heightened tensions and conflicts that have driven commodity prices, particularly gold [4][6] Group 2: Impact on Specific Commodities - Gold has seen a significant rally as investors seek safe-haven assets amid rising geopolitical tensions, with the Middle East conflicts further enhancing its status [5][6] - Oil prices have been an outlier, experiencing a decline despite geopolitical tensions, with a notable 20% drop in 2025, indicating a complex relationship between geopolitical events and oil pricing [6]