Tuesday’s congressional testimony from incoming Fed Chair Kevin Warsh, his first since nomination, is crucial, where markets will be listening closely for early signals on his policy stance and the Fed’s tolerance for energy driven inflationary pressure.
Kaynat Chainwala,
AVP Commodity Research,
Kotak Securities
Mumbai, April 20, 2026: Crude prices rebounded sharply on Monday, with WTI and Brent surging more than 6% to around $91.2/bbl and $97.5/bbl respectively, as the Strait of Hormuz closure was reinstated over the weekend. The rally reversed Friday’s sharp selloff, when WTI had fallen to $80.6/bbl and Brent to $86/bbl, after Iran’s foreign minister declared the strait open and President Trump described it as “completely open and ready for business.” That optimism proved short‑lived. Over the weekend, Iran reimposed restrictions, citing U.S. “breaches of trust,” IRGC gunboats fired on a transiting tanker, several vessels turned back, and the U.S. seized an Iranian cargo vessel in the Gulf of Oman after it attempted to breach the blockade. Iran has since vowed retaliation, while the U.S. renewed threats to strike Iranian infrastructure if a deal is not reached. With the two‑week ceasefire due to expire on Wednesday, the window for de‑escalation is narrowing fast. Peace talks are scheduled for Monday, but reports suggest Iran may skip, leaving the diplomatic path uncertain. Even if negotiations resume, the core disputes remain unresolved, chiefly Iran’s nuclear programme and the conditions under which the Strait reopens. The double blockade of the chokepoint, through which roughly a fifth of global oil supply passes, remains intact, putting a firm floor under crude prices despite shifting ceasefire signals.
Bullion came under pressure against this backdrop. Spot gold slipped below $4,740/oz and silver fell below $79/oz earlier in the session as the dollar firmed above 98.3, with crude’s surge stoking renewed fears of an energy‑driven inflation shock. These concerns are weighing on rate‑cut expectations, which in turn limits the scope for a meaningful rally in non‑yielding assets in the near term. The week ahead offers several catalysts. U.S. retail sales, pending home sales and weekly jobless claims will be parsed for signals on consumer resilience, while flash PMI readings across major economies will test the growth narrative. Overarching all of this will be Tuesday’s congressional testimony from incoming Fed Chair Kevin Warsh, his first since nomination, where markets will be listening closely for early signals on his policy stance and the Fed’s tolerance for energy‑driven inflationary pressure. Nonetheless, the primary driver is likely to remain the evolving U.S.–Iran standoff, with any material escalation expected to exert additional downward pressure on bullion prices.
