Commodity Markets & Air Liquide: Gold, Silver, Palm Oil Analysis

Global commodity markets are experiencing a dynamic period, influenced by central bank monetary policies and geopolitical risks. Gold and silver prices, in particular, are navigating between the US Federal Reserve's (Fed) interest rate hike probabilities and escalating tensions in the Middle East, while palm oil maintains its upward trajectory driven by a robust demand outlook. Meanwhile, industrial gases giant Air Liquide, despite delivering strong operational performance in its first-half financial results, is encountering valuation concerns in the market.

Gold is currently trading around $4,029 this morning, down 1.17% on the day and 25.4% off its six-month highs. The likelihood of a Fed rate hike (a 43% probability for the July 28-29 FOMC meeting) is exerting downward pressure on precious metals, yet structural demand for gold from central banks continues to provide significant support for prices. Goldman Sachs estimates central bank purchases at 81 tonnes in May alone, nearly five times the pre-2022 average, and maintains a year-end 2026 target of $4,900. However, JPMorgan lowered its 2026 gold forecast by 8% to $4,400, and a Reuters poll of analysts revised their median forecast for 2026 downwards to $4,509 per ounce.

Silver, during this period, is trading around $56.85 per ounce, up 1.50% on the day, but lacks strong upside momentum as Middle East tensions support the US Dollar and inflation risks keep hawkish Fed expectations alive. The World Silver Survey forecasts a sixth straight supply deficit of 46.3 million ounces in 2026. Industrial demand for silver is expected to continue rising, fueled by the explosive growth of the AI sector and the ongoing expansion of the green energy sector. Analysts project silver prices to average around $56 in 2026, potentially climbing to $65, with some experts suggesting $75 and even $100 could be achievable. J.P. Morgan Global Research anticipates an average of $81/oz in 2026.

In the palm oil market, prices are trading at a premium due to surging crude oil and soybean oil prices amidst escalating tensions in the Middle East. The Bursa Malaysia Derivatives contract for October delivery rose 87 ringgit to 4,709 ringgit a ton. The outlook for the palm oil market in 2026 is moderately constructive, with demand-side factors such as Malaysia's expansion of its biodiesel mandate from B10 to B15 by mid-2026, robust procurement for India's festive and wedding seasons, and a recovery in China's food processing sector supporting prices. Experts foresee global palm oil prices remaining elevated between 2026 and 2031, driven by rising food demand, expanding biodiesel use across Southeast Asia, and limited replanting in Indonesia and Malaysia. The market size is projected to grow from $69.46 billion in 2025 to $72.71 billion in 2026.

French industrial gases company Air Liquide (AIQUF) reported its first-half financial results on July 28, 2026, delivering a recurring operating profit of €2.89 billion, broadly in line with expectations. Revenue rose 0.8% year-over-year to €13.83 billion, or 4.3% when excluding currency and energy impacts. The company stated it achieved nearly €300 million in efficiency gains during the first half, contributing to an operating margin increase of over 100 basis points to 20.9%. Despite securing a record €6 billion backlog of new project signings, its stock fell 2% in European trading. This decline may be attributed to profit-taking after the stock's 19% year-to-date gain. According to GuruFocus analysis, AIQUF's current price of $200.38 is approximately 16.4% above its intrinsic GF Value™ of $172.15, indicating modest overvaluation. The company maintains its targets for a 100-basis-point operating margin gain in both 2026 and 2027.

Overall, commodity markets will continue to be significantly influenced by the Fed's interest rate path and global geopolitical developments. While near-term rate hike expectations may pressure gold and silver, central bank purchases and industrial demand stand out as supportive factors in the long term. Palm oil appears set to maintain its upward trend due to strong underlying demand and increasing biofuel utilization. For companies like Air Liquide, market valuation and the macroeconomic outlook will shape investor interest, alongside operational successes.