Gold prices rose on Tuesday amid hopes of easing tensions in the Middle East, but the metal remains on track for its worst monthly performance in more than 17 years, as elevated energy prices have weakened expectations for U.S. rate cuts this year.

Spot gold climbed 1.5% to $4,578.89 per ounce, while U.S. gold futures for April delivery rose 1.2% to $4,611.30 per ounce. The U.S. dollar declined, making dollar-denominated commodities more attractive for holders of other currencies.

Ilya Spivak, Head of Global Macro at Tastylive, said: “Gold prices are rebounding in early Asia-Pacific trading after U.S. President Donald Trump told aides he is prepared to end the U.S. military campaign against Iran… this has triggered a risk-sensitive response across financial markets.”

Spivak added that gold “has been largely stable over the past week, with a notable rise last Friday alongside a drop in Treasury yields, suggesting markets are beginning to view the Iran conflict as a potential economic risk.”

Gold has fallen more than 13% so far this month, putting it on track for its largest monthly decline since October 2008, pressured by a stronger U.S. dollar and fading expectations for Federal Reserve rate cuts this year. However, it remains up حوالي 5% for the current quarter.

Traders now see the likelihood of any Fed rate cuts this year as minimal, as persistently high energy prices could fuel inflation. Gold typically benefits in a low-interest-rate environment, as it is a non-yielding asset.

Before the outbreak of conflict in the Middle East, expectations pointed to two potential rate cuts by the Federal Reserve this year, according to CME Group’s FedWatch tool. Federal Reserve Chair Jerome Powell said on Monday that the central bank can afford to wait and assess the impact of the conflict on the economy and inflation, noting that oil price shocks are typically viewed as temporary.

Meanwhile, spot silver rose 3.3% to $72.27 per ounce, platinum gained 1% to $1,916.77, and palladium climbed 2.3% to $1,437.76.

In summary, gold is receiving short-term support from easing geopolitical tensions, but remains under structural pressure from a strong dollar and U.S. monetary policy expectations.

Global fertilizer and ammonia trade is facing significant pressure due to the effective closure of the Strait of Hormuz, amid ongoing uncertainty surrounding diplomatic negotiations between the United States and Iran.

According to Rystad Energy’s 2025 global trade map, around 15% of global ammonia trade and 21% of urea trade—a nitrogen-rich fertilizer—are tied to exporters that could be affected by the strait’s closure. These include major Middle Eastern producers such as Saudi Arabia and Qatar, in addition to Kuwait, Bahrain, the United Arab Emirates, Iran, and Iraq.

The firm’s analysis indicates that continued logistical disruption could threaten the already strained ammonia and urea markets, with potential spillovers into food and agricultural supply chains, particularly in countries most dependent on these trade flows.

Risks to Food Security

Minh Khoi Le, Senior Vice President and Head of Global Hydrogen at Rystad Energy, said the message to policymakers and buyers is clear: energy security is directly linked to food security.

More than one-fifth of urea exports from Middle Eastern producers directly impact agricultural output. India is among the most exposed, importing between 6% and 8% of its fertilizers from Gulf countries.

A prolonged closure of the strait could quickly translate into tangible economic risks, including potential food shortages, disruptions in industrial production, water supply challenges, and broader global risks depending on the duration of the conflict.

Most Exposed Countries

Beyond India, several Asia-Pacific countries rely heavily on fertilizer flows passing through the strait, including South Korea, Thailand, and Australia.

Countries in the Americas are also dependent on these supplies, particularly the United States and Brazil.

In the event of supply disruptions, major importers—led by India and South Korea—would need to seek alternative sources to meet their ammonia demand.

Rising Global Production Costs

Producers with assets in other regions may ramp up output, but these facilities are typically located in higher-cost regions such as Europe. This could drive up food prices and increase global inflationary pressures.

Can Green Ammonia Be the Solution?

Some experts see green or e-ammonia—produced using renewable energy instead of fossil fuels—as a potential long-term solution to enhance supply security.

The concept previously gained attention as a way to strengthen Europe’s energy security following Russia’s invasion of Ukraine in 2022, but it has yet to achieve widespread adoption. Pilot projects are currently underway in China, though its ability to replace conventional fertilizers remains uncertain.

While green ammonia production is generally more expensive, recent tenders in India have shown prices close to those of conventional ammonia.

Recent agreements in this space include a deal between Uniper and AM Green to produce green ammonia in India for export to Europe, as well as offtake agreements between Yara International and ATOME Energy in Uruguay.

However, most of these projects are not expected to begin production before 2030, limiting their ability to ease near-term market pressures.

Scale of Trade at Risk

Global ammonia trade stood at approximately 10.9 million tonnes annually in 2025, down from 12.3 million tonnes in 2024. Around 15% of this trade could be affected if the Strait of Hormuz remains closed, particularly supplies originating from Saudi Arabia’s eastern coast.

Global urea trade reached about 50.8 million tonnes annually in 2025, of which roughly 10.6 million tonnes originate from countries impacted by the disruption, notably Saudi Arabia, Qatar, and the UAE.

Of these volumes, approximately 2.2 million tonnes were exported to India, underscoring its heavy reliance on Middle Eastern fertilizers.

Other major importers of urea from the region include Thailand, Australia, Brazil, and the United States.

Mounting Pressure on Fertilizer Trade

This is not the first shock to hit the global fertilizer market. Russian exports declined significantly following the war in Ukraine, yet still accounted for around 5% of global ammonia trade and 15% of urea exports in 2025.

Recent developments in the Middle East add another layer of risk to an already strained global fertilizer market, highlighting the concentration of supply among a limited number of producers and critical maritime chokepoints.

Wall Street’s main indices rose on Tuesday as markets awaited a report suggesting a potential de-escalation in the Middle East conflict, which had pushed the S&P 500 and Dow Jones toward their largest monthly declines in years.

The Wall Street Journal reported on Monday that US President Donald Trump told aides he is willing to end the military campaign against Iran even if the Strait of Hormuz remains largely closed, helping ease some investor concerns.

The month-long conflict has weighed on global markets, putting the S&P 500 and Dow Jones on track for their biggest monthly decline since September 2022, while the S&P 500 is also heading for its worst quarterly performance since the same year.

Although oil prices were volatile on Tuesday, they are still heading for record monthly gains. The S&P 500 energy sector has risen more than 11% so far in March, making it the only sector expected to close the month in positive territory, and marking its largest quarterly gain on record.

Mark Malek, Chief Investment Officer at Siebert Financial, said: “Market moves reflect what traders want to see and hear, and they want to hear that a resolution will come quickly.” He added that rising oil prices due to the closure of the Strait of Hormuz will ultimately “damage the economy.”

Meanwhile, the S&P 500 technology sector rose 2% after a sell-off earlier this quarter, driven by concerns over heavy capital spending plans and the impact of AI-driven innovation on software services. Shares of specific companies also gained, with CoreWeave rising 8.4% after securing an $8.5 billion loan to expand AI infrastructure.

Marvell Technology shares climbed 6.8% after a $2 billion investment from Nvidia. Meta shares rose 3.9% and Alphabet gained 2.5%, pushing the communication services sector up 2.2%.

Nine of the 11 major S&P 500 sectors advanced during the session. As of 10:05 AM ET, the Dow Jones Industrial Average rose 627.92 points, or 1.39%, to 45,844.06, while the S&P 500 gained 103.78 points, or 1.64%, to 6,447.50, and the Nasdaq Composite climbed 432.71 points, or 2.08%, to 21,227.35.

Data from the February job openings report showed vacancies declined to 6.882 million, slightly below market expectations of 6.918 million, while the consumer confidence index came in above forecasts. Markets are also awaiting comments from Federal Reserve policymakers, including Austan Goolsbee and Michelle Bowman, for signals on the future path of monetary policy.

Since the start of the conflict, rising oil prices have renewed inflation concerns, leading market participants to rule out any potential easing by the Federal Reserve this year, compared with expectations of two rate cuts before the war, according to the CME FedWatch tool.

Among other stocks, McCormick shares fell 6%, while Unilever agreed to spin off its food unit and merge it with McCormick in a cash-and-stock deal valued at about $44.8 billion. Constellation Energy shares dropped 7.1% after forecasting 2026 earnings below Wall Street expectations.

On the New York Stock Exchange, advancing stocks outnumbered decliners by a ratio of 5.23 to 1, while the ratio was 4.21 to 1 on Nasdaq. The S&P 500 recorded three new 52-week highs and three new lows, while the Nasdaq Composite posted 19 new highs and 85 new lows.

Aluminum prices posted a record rise this month, as the war in the Middle East disrupted supplies and damaged local production facilities, tightening the global market.

The lightweight metal climbed above $3,500 per ton in London, heading for monthly gains of more than 12%, the highest level since April 2018, despite a broader downward trend in metals during March. Commodities, including base metals, have been heavily impacted by the conflict involving the United States, Israel, and Iran. The Gulf region accounts for about one-tenth of global aluminum production, with exports constrained due to the closure of the Strait of Hormuz, in addition to drone and missile attacks targeting facilities operated by Aluminium Bahrain BSC and Emirates Global Aluminium PJSC.

While both companies have yet to clarify the exact extent of the damage to their facilities, uncertainty remains over the impact on supply and demand balance. Analyst Bernard Dahdah of Natixis SA said in a note that output from EGA’s Al Taweelah plant, which has a capacity of 1.6 million tons per year, could be considered “out of the equation” in the long term. This could shift the market from a surplus of 200,000 tons to a deficit of around 1.3 million tons next year. Dahdah’s assessment is based on the assumption of “significant” damage forcing an uncontrolled shutdown, leading to metal solidification in smelting pots and causing lasting damage that could take at least a year to repair.

In other metals, prices were stable to slightly higher after a Wall Street Journal report said that US President Donald Trump told aides he is prepared to end the US campaign even if the Strait of Hormuz remains largely closed. However, copper, zinc, and nickel are still heading for monthly losses, as the war raises energy costs and triggers warnings about global economic growth.

Aluminum has been the most directly affected metal due to the region’s role as a major supplier, with most of its output exported. These disruptions have pushed up price premiums in other regions, including Japan, while China has seen increased demand for its products as it dominates global production.

Three-month aluminum contracts rose 3.4% to $3,518 per ton on the London Metal Exchange as of 1:26 PM local time. Other metals were more subdued, with copper nearly unchanged at $12,213 per ton, still down more than 8% in March and heading for its largest monthly loss since June 2022.