Geopolitical conflicts exacerbate the situation, leading to divergence in precious metals and oil prices! What is the market outlook for 2026?

Hedging assets rise together, gold and silver lead the way

Market data on January 5 shows that safe-haven demand is driving precious metals higher. Gold rose nearly 2%, regaining levels above $4,400 per ounce, while silver surged more than 4% and broke through $76 per ounce. In contrast, crude oil prices show a pattern of initial rise followed by decline—WTI crude down 0.09% to $57.27 per barrel, and Brent crude slightly up 0.05% to $60.82 per barrel.

The core factor triggering market volatility is the U.S. military action against Venezuela on January 3 (local time), and the arrest of the country’s leader Maduro, which quickly ignited market risk-off sentiment.

Precious metals have sufficient short-term momentum but face annual rebalancing impacts

Market analysis generally believes that escalating geopolitical tensions will maintain the upward momentum of gold and silver in the short term. However, analysts also warn that the Bloomberg Commodity Index (BCOM) will undergo annual rebalancing from January 8 to 14, during which passive fund selling could cause technical pullbacks in precious metal prices.

Long-term forecasts show clear divergence among institutions. Macquarie Group’s commodities strategist Peter Taylor believes that gold price forecasts are becoming more uncertain, with investor sentiment now the main driver and fundamentals marginalized. The firm predicts gold will slide to $4,200 per ounce by the end of 2026, implying a slight correction from current levels.

Conversely, Nicky Shiels, analyst at Swiss precious metals firm MKS Pamp, remains optimistic, noting that the global currency depreciation cycle is still in its early stages. She forecasts gold could rise to $5,400 per ounce by the end of 2026, over 20% higher than current levels.

Doubts over Venezuela crisis impact on oil market

Venezuela holds the world’s largest proven oil reserves, but its actual production is quite embarrassing—less than 1 million barrels per day, accounting for only about 1% of global output. This “numerical gap” is a key variable in assessing oil price trends.

Goldman Sachs divides the post-Venezuela event oil market into two scenarios. If the new government, supported by the U.S., obtains full sanctions exemptions, and through imports of diluents, well repairs, and upgrade of processing facilities, production could increase by 400,000 barrels per day before 2026, with Brent crude prices expected to fall to $54 per barrel.

The opposite scenario is if political turmoil worsens or production is hindered, leading to a decline of 400,000 barrels per day, pushing Brent crude prices up to $58 per barrel.

Based on these scenarios, Goldman Sachs maintains its 2026 target prices of $56 per barrel for Brent and $52 for WTI crude. Notably, the International Energy Agency (IEA) warns that the global oil market will face a record oversupply in 2026.