Speaking to CNBC-TV18, Narne said, “The theme of de-dollarisation is the predominant backbone of commodity value,” adding that the shift began around 2022 as countries started questioning the need for the dollar in global trade. He explained that diversification of reserves by major economies, including China and India, has supported commodities, particularly gold, and altered the way markets function.
His comments come amid heightened geopolitical tensions following coordinated US-Israeli strikes on Iran in February, which have severely disrupted global energy and metals supply chains. The closure of the Strait of Hormuz and damage to key energy infrastructure have pushed crude prices sharply higher, with gains of 60–120% across grades, while also triggering supply shocks in liquefied natural gas and aluminium.
Narne said commodities are no longer behaving as a pure demand-supply story. “We have to throw away that theory now. It is different—strategic importance matters. Geopolitics has come into play in a big way,” he said, describing the current phase as a “great decoupling” from traditional pricing models.
He pointed to significant supply disruptions in West Asia, noting that nearly 17–18% of global LNG supply has been affected and around 9% of aluminium output has been impacted due to shipping disruptions and attacks on production facilities. These developments have pushed aluminium prices to multi-year highs despite no major change in underlying demand.
The crisis has also had broader macroeconomic implications, particularly for Europe, which remains heavily dependent on energy imports. Rising energy costs have already pushed inflation higher, delaying expectations of interest rate cuts by major central banks, including the US Federal Reserve.
Despite volatility in precious metals during the peak of the conflict—when gold and silver saw sharp corrections due to liquidity pressures—Narne maintained that the long-term outlook remains intact. He said the recent rally in gold, which has more than doubled over the past two years, has been driven largely by central bank buying rather than expectations of lower interest rates.
Highlighting the scale of global financial imbalances, Narne noted that the US faces a $39 trillion debt burden, which could further support gold prices over time. “If you monetise that $39 trillion debt, it equates mathematically to gold at around $10,600,” he said.
Also Read | Debt, not war, is the real driver of gold prices, says World Gold Council’s David Tait
Looking ahead, he expects commodities to remain influenced by geopolitical developments rather than fundamentals. While he sees some consolidation in the near term as markets approach the top of the current cycle, metals such as copper and aluminium are likely to remain structurally strong, supported by supply constraints and emerging demand drivers such as data centre expansion and power infrastructure upgrades.
Narne added that energy markets will remain volatile and headline-driven, while metals are emerging as the preferred investment segment within commodities as the global economy adjusts to a more fragmented and geopolitically driven trade environment.