Natural calamity ? earthquake and tsunami in Japan ? has now been added to the already uncertain conditions in the global commodities markets caused by a host of factors including ongoing geopolitical concerns, volatile currency movements, creeping slowdown apprehensions and inflation fears.

No wonder, the price trajectory reflects divergent paths as fundamentals have somewhat receded into the background and non-fundamentals factors dominate.

Crude market continues to remain firm on supply concerns, especially following outage of Libyan oil. Gold has stayed above $1,400 an ounce consolidating its gains, while silver prices hit a three-decade high. Base metals are under pressure.

Emerging concerns over rising crude and possible demand slowdown are pressuring the base metals complex with copper prices closer to $9,000 a tonne.

Gold: Precious metals complex came under pressure last week following the ratings downgrade of Spain when equity markets weakened, oil prices eased and concerns over China's growth emerged in the wake of weaker-than-expected trade data. On Friday in London, gold PM Fix was at $1,412 an ounce, little changed from the previous day's $1,413/oz. Silver, of course, was down 3.1 per cent with Friday AM Fix at $34.10/oz versus previous day's $35.19/oz.

Overall, gold and silver prices seem to be well consolidated at all-time and multi-decade highs as investors look for safe haven assets in these times on uncertainty.

In the coming weeks, if geo-political concerns worsen and inflation fears do not abate, gold is likely to test higher highs. Silver may move in tandem, but any downward correction in the yellow metals will cause a steeper downturn in silver. Prices will be volatile because of weak fundamentals.

Base metals: Global geopolitical instabilities, inflation fears and growth concerns have combined to weigh heavily on the complex. The uncertainty in the market is the cause of palpable anxiety. Last week, nickel fell by 9.9 per cent, zinc was down 7.5 per cent, copper lost 7.2 per cent and aluminium 2.2 per cent.

While the market fundamentals for some metals in the complex are constructive, a clear directional change in prices will happen only when there is a semblance of confidence that the current geopolitical uncertainty will not exert a broader macroeconomic impact.

As and when the clouds of uncertainty clear, nickel has the potential to perform rather well given that physical stocks at LME are declining and physical premiums rising. Into the second quarter, both copper and tin are at the forefront in terms of price performance as the market balance looks tight.

Crude: Despite recent two-way changes in prices as immediate reaction to developments, the market is closely watching signals for further supply disruptions. There is little evidence currently that the geopolitical situation in MENA region will ease anytime soon. High crude is also the cause of inflation fears. In addition to Libya, there are supply concerns relating to Iraq and Nigeria. Upside risk to prices appears real on current reckoning.

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