Commodity wrap: oil jumps as peace talks stall; gold above $5,000

Oil prices rose sharply on Wednesday as talks between Russia and Ukraine broke down abruptly, raising geopolitical tensions between the nations. 

Both crude benchmarks, West Texas Intermediate and Brent, were nearly 3% higher at the time of writing. 

Meanwhile, gold prices were back above $5,000 as investors waited for the minutes of the Federal Reserve’s last policy meeting.

Silver prices jumped as well, with the white metal surging more than 5% to trade above $77 per ounce on COMEX. 

Oil jumps

Following two hours of "difficult" peace talks in Geneva between Ukraine and Russia, which Ukrainian President Volodymyr Zelenskiy confirmed had concluded, oil prices saw a nearly 3% gain on Wednesday.

Following the conclusion of talks, Zelenskiy alleged that Russia was intentionally attempting to obstruct advancement toward an agreement to terminate the four-year-old conflict.

The US-mediated discussions in Switzerland occurred against the backdrop of recent statements by US President Donald Trump, who twice suggested that the responsibility for ensuring the talks' success rested with Ukraine.

Meanwhile, Hungary has halted diesel shipments to Ukraine. Foreign Minister Peter Szijjarto stated on Wednesday that these shipments will not resume until Ukraine restarts the flow of crude oil via the Druzhba pipeline to Hungary.

This development follows weeks of disruptions in Russian oil supplies flowing through Ukraine to Slovakia and Hungary, which Kyiv attributes to a Russian attack on January 27.

Meanwhile, progress was noted in talks between the US and Iran, where both parties agreed on "guiding principles" aimed at resolving the dispute over Iran's nuclear program. 

However, Iran simultaneously employed provocative tactics, including the temporary closure of the Straits of Hormuz for military exercises.

“It’s no secret that President Trump favours lower oil prices, and blocking the Straits for a prolonged period could lead to a sharp spike higher. It could also provoke the US into taking military action against Iran,” said David Morrison, senior market analyst at Trade Nation.

The price of WTI crude oil was last at $64.33 a barrel, up 3.4%, while Brent was also 3.3% higher at $69.64 a barrel. 

Gold rebounds from lows

On Wednesday, gold prices climbed over 2%, recovering from a one-week low reached in the prior session. 

Prices rose as investors anticipated the release of the minutes from the US Federal Reserve's January meeting, expected later in the day.

Gold experienced a brief dip on Tuesday afternoon, falling below $4,850 to reach a two-week low. 

However, it quickly stabilised around this mark, suggesting that $4,850 provides a minor support level.

Prices have since recovered, with gold trading back above $5,000.

Awaiting the release of the Federal Reserve's minutes from its January policy meeting, investors remained cautious.

The minutes are anticipated to provide new clarity on the potential schedule and magnitude of monetary easing.

“The earlier pullback had come as the US dollar strengthened and risk‑off sentiment spread across broader markets,” Ewa Manthey, commodities strategist at ING Group, said in a note. 

Thin liquidity, largely due to much of Asia being closed for the Lunar New Year, amplified the price moves, making prices more sensitive to macro and foreign exchange dynamics.

The current price decline seems corrective, although near-term price movement is still dependent on the strength of the dollar and overall risk appetite, Manthey said. 

“With Asian liquidity set to normalise and macro uncertainty persisting, gold should find stronger underlying support, with constructive fundamentals suggesting further dips are likely to be met by renewed buying interest.”

The COMEX gold contract was at $5,014.04 an ounce, up 2.2%. 

Silver nearing $80

Silver briefly dipped below the $72 per ounce mark in the previous session before quickly recovering. 

For the remainder of the session, it held just above $72 but was unable to cross back over the $74 level. 

“The daily MACD has gone from extremely overbought levels to mildly oversold. This could suggest that a rally is on the cards,” Morrison said. 

“But it could also presage a longer period of sideways consolidation, with prices confined to a relatively narrow $10 range of $80 as resistance and support around $70,” he added. 

A prolonged drop below $70 would signal danger for the bulls. Conversely, a decisive move outside this price range will likely be accompanied by a significant surge in volatility.

The silver contract on COMEX was last at $77.487 per ounce, up 5.4% from the previous close.