NextFin news, on November 14, 2025, the US Federal Reserve delivered hawkish commentary signaling a diminished likelihood of an interest rate cut in December, a stance that sent shockwaves through precious metals markets. Gold prices dropped by over 3.5%, settling near $4,046 per ounce on COMEX, while silver suffered a more pronounced decline of over 5%, falling to approximately $50.37 an ounce. These moves occurred after Fed officials including San Francisco Fed President Mary Daly and Boston Fed President Susan Collins highlighted persistent inflationary concerns and a cautious labor market assessment, effectively raising the bar for any near-term monetary easing.
In stark contrast, oil prices climbed significantly on the same day, with West Texas Intermediate (WTI) crude rising nearly 1.9% to about $59.79 per barrel and Brent crude gaining 1.6% to reach $63.99 per barrel. This upward pressure on oil was mainly driven by supply fears sparked by a Ukrainian drone strike that incapacitated the Russian Black Sea port of Novorossiysk, a critical energy export hub. The attack inflicted damage on oil storage infrastructure and threatened to disrupt crude oil shipments, raising concerns about tightening global supply amid an already volatile geopolitical environment.
Base metals such as copper and aluminium also declined around 1.2% each on the London Metal Exchange, their prices down following the broader market reaction to the Fed’s hawkish tone. Copper closed near $10,774.80 per ton and aluminium at $2,846.48 per ton, reflecting cautious investor sentiment towards industrial metals in light of tighter monetary policy expectations.
The Federal Reserve’s cautious message stemmed from ongoing inflation stubbornness despite signs of labor market cooling. Policymakers emphasized the need for maintaining restrictive financial conditions to anchor inflation expectations firmly at the 2% target. This outlook dampened precious metals demand, as lower interest rates tend to enhance gold and silver’s investment appeal as non-yielding safe havens. Conversely, the prospect of steady or higher rates increases the opportunity cost of holding bullion relative to interest-bearing assets.
On the geopolitical front, the Ukrainian drone attack that resulted in the temporary suspension of oil exports from Novorossiysk port underscored persistent risks to Russian oil supplies. With Russia being a significant global crude exporter, disruptions at this hub triggered market jitters over supply security. Although WTI crude struggle to break and maintain levels above $60 per barrel, the increased risk premium was evident following the attack, suggesting that geopolitical events continue to be major supply-side determinants.
Earlier, the oil market had faced a bearish setback midweek when OPEC revised its outlook, projecting adequate global supply to meet demand in 2026, a departure from prior expectations of deficits. The US Energy Information Administration’s reports of rising crude stocks and smaller declines in gasoline inventories added to downward pressures. However, the newly introduced supply uncertainties related to Russia swiftly shifted the market sentiment back towards gains.
The volatility across commodities reveals the complex dynamics between monetary policy, geopolitical tensions, and their asymmetric effects on different asset classes. While the Fed’s hawkish approach weighs heavily on bullion as safe-haven demand eases, oil benefits from supply risk premiums amid geopolitical unrest surrounding Russian exports.
Looking ahead, investors should monitor ongoing US inflation data and Fed communication for signals about monetary policy trajectory, as further tightening could continue to cap precious metals. Meanwhile, any escalation of conflict or prolonged disruption in Russian oil exports would likely keep crude prices elevated. Additionally, industrial metals may face headwinds from rising financing costs but could rebound if global manufacturing momentum improves. Overall, commodity markets remain finely balanced between macroeconomic fundamentals and geopolitical developments, underscoring the importance of a multi-faceted, data-driven analysis for strategic positioning going into 2026.
According to Invezz, the combination of Fed caution and Russian supply concerns currently shapes a divergence between safe haven bullion and energy commodities, a pattern likely to persist amid ongoing uncertainty around US interest rates and Eastern European geopolitics.
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