Coal prices have increased by 18 per cent, aluminium rates by 6 per cent, and gold stands to gain significantly due to the hostilities in the Persian Gulf with the US, and Israel pitted against Iran.

“Following US-Israeli strikes on Iran over the weekend of February 28-March 1, we think gold could reach a new all-time-high above $5,600/oz this week if no signs of de-escalation materialise,” said research agency BMI, a unit of Fitch Solutions.

Gold, which soared to over $5,350 an ounce at the beginning of the week, has pared its gains on a strong dollar and fears of hike in interest rates, to below $5,200 an ounce by Wednesday evening. Reports from the US said that Iran had reached out to the Donald Trump administration for an end to the War.

Cash for liquidity

However, analysts say that the selling in gold seen recently, leading to prices see-sawing, is because investors needed cash for liquidity. 

Last week, just before the hostilities broke out, ING Think, the financial and economic analysis arm of Dutch multinational financial firm ING, said that though the momentum in gold may moderate, structural drivers underpinning the market are firmly in place – and in some cases are strengthening.

“…we think gold can still trade higher this week, potentially reclaiming $5,600/oz and posting a fresh all-time-high,” said BMI. 

Two reasons

It attributed two reasons to this. The first was the lack of certainty surrounding the duration of the current geopolitical risk premium in oil prices. 

“Without a clear consensus on how long the conflict and the associated premium will last, markets will shelter in haven assets like gold,” the research agency said..

The second factor for gold being bullish stems from physical disruption to the bullion market if flights are unable to transit through Dubai, which is one of the world’s largest gold refiners. 

“Although this is unlikely to materially affect the physical market, which is highly liquid and well stocked, the premise of disruption will bolster bullish sentiment, in our view,” said BMI.

At 1905 hours IST, gold was quoted at $5,189 an ounce, while the yellow metal’s April futures on COMEX ruled at $5,196.44 an ounce. 

Upside risks

ING Think said the escalation in the conflict in the Persian Gulf increased upside risks to physical aluminium premiums, rather than materially tightening global supply. 

“The Middle East accounts for around 8 per cent of global aluminium capacity and is heavily reliant on the Strait of Hormuz for both metal exports and alumina imports, with key producers being Saudi Arabia, the UAE and Bahrain,” it said.

BMI expects aluminium to see the largest gains from disruption in the Middle East, with prices ruling near $3,350/tonne currently. 

“Heightened risks of disruption in the Strait of Hormuz, a critical export corridor for Middle East aluminium producers, have compounded existing supply-side concerns. Collectively, the UAE and Bahrain accounted for an estimated 6 per cent of global aluminium output in 2025 (around 4.3 million tonnes),” it said. 

Fuel switch buoys coal

Reports said aluminium has also surged in view of Qatar halting production due to the tensions in the Persian Gulf region. It will take at least six months for production to resume at Qatalum, a joint venture between Qatar and Norsk Hydro ASA.

BMI said aluminium prices will likely remain near $3,300/tonne in the coming weeks. Any further material escalation would amplify supply-side pressures and present significant upside risk.

“With the market already set to run a deficit in 2026, we believe a deterioration in conditions … could lift prices to $3,500,” said the research agency.

BMI said it sees upside risk for seaborne prices of thermal coal if Strait of Hormuz disruption affects the availability of Qatari liquefied natural gas (LNG), which could encourage fuel switching in key markets such as Japan and South Korea. Qatar has shut down its LNG facilities, a rate event, in view of the crisis after Iranian drones attacked the country’s LNG hub. 

“Gas prices have already spiked, with benchmark Henry Hub prices up almost 4% and approaching $3/MMBtu. If the availability of Qatari LNG is constrained for more than a week, a potential winner would be seaborne thermal coal,” said the research agency. 

Demand for Indonesia, Australian coal

This would be a temporary and significantly more limited repeat of the situation when the Ukraine war broke out in 2022. Then, the buying of natural gas from Russia got cut, leading to a spike in demand for thermal coal.  

On Wednesday, Newcastle thermal coal futures (May) ruled at $138 a tonne, a 16-month high. Qatar accounts for four-fifths of LNG supply in Asia and nearly 15 per cent of global.

Though coal trade is not carried through the Strait of Hormuz, expectations of Japan and South Korea switching to coal from LNG has raised prices of Australian and Indonesia coal by 15 per cent since the beginning of this week.

Published on March 4, 2026