Gold, Silver, Oil May Surge as Venezuela Crisis Shocks Markets

After a turbulent journey through 2025, markets started the New Year on a rather upbeat note. After falling by over 10% last year, the US dollar remained stable at 98.5 throughout the opening trading session, while US stocks slightly increased on Friday, building on double-digit gains in 2025.

Global Markets Begin 2026 on a Strong Note

Weaker stock markets and better-than-expected economic data, such as increased house sales, stable home prices, a good December Chicago PMI, and weekly jobless claims dropping to a one-month low of 199,000, all contributed to the dollar’s weekly strengthening.

Dollar Stability and Economic Data Support Sentiment

Gold had a great start to the year, rising more than 1% to $4,370 per ounce, continuing its best yearly performance since 1979. Due to growing industrial demand, market shortfalls, and the weakening of the dollar, silver increased more than 2% to around $73. Although policymakers are still at odds about the timing and scope of policy easing, the December FOMC minutes showed an increasing willingness to it if inflation continues to decline.

Gold and Silver Rally Amid Policy Signals

Safe-haven demand was increased by geopolitical concerns, such as US sanctions on Venezuelan oil trade and fresh attacks on energy infrastructure by Russia and Ukraine.

However, COMEX gold and silver saw a significant weekly retracement as investors recorded profits after remarkable rises. Silver plunged more than 8% to around $71, retreating from a record high of $82.67, while gold slid over 5% to below $4,330 per ounce. The CME’s stricter margin requirements also made some long positions unravel.

Profit Booking Triggers Sharp Metal Pullback

Monday marked the start of the week for MCX Gold futures, which had the biggest single-day decrease of almost 3.6 percent in the previous two months. Prices have fluctuated in a sideways range after this drop. A return to Rs 1,38,700 is feasible if prices are able to stay above the current support levels of Rs 1,34,300 per 10 gram and Rs 1,33,200. A clear breach and persistent decline below Rs 1,33,200, however, can result in more correction.

MCX Gold Technical Levels to Watch

Despite erratic trading, base metals had a solid start to the year and continued their year-end momentum. Zinc and aluminum both gained more than 1%, with aluminum breaking over $3,000 per tonne for the first time since 2022. Copper led advances, finishing above $12,450 per tonne after reaching new highs. Sharp rises on the MCX and Shanghai markets bolstered early strength, which extended into the LME after holiday reopenings.

Base Metals Extend Year-End Momentum

WTI crude oil had a strong start to 2026 and ended the week close to $57.3 per barrel. Although geopolitical dangers from Russia and Venezuela caused sporadic price surges, oil plummeted 20% in 2025—its worst yearly decline since 2020—due to worries about oversupply. The OPEC+ meeting on January 4 is currently the focus of markets, where it is anticipated that the group will stick to its commitment to halt any production increases.

Crude Oil Volatility and OPEC+ in Focus

Due to the continued attacks between Russia and Ukraine and the Trump administration’s intensified pressure on Venezuela, geopolitical tensions are still high.

Following a significant military operation on Saturday, US soldiers apprehended Venezuelan President Nicolás Maduro and his wife and accused them of drug trafficking. As a result, markets are expected to open sharply on Monday. The increase is a significant geopolitical shock that is expected to significantly increase demand for gold and silver as safe havens and drive up oil prices due to grave worries about supply interruptions from a nation with the greatest oil reserves in the world.

Venezuela Shock Raises Global Market Tensions

Following the December FOMC minutes that suggested interest rates could stay stable for the time being, traders will also be watching the next US employment data for hints on monetary policy. Only a 17% possibility of a rate drop in January is now priced in by markets. The first full trading week of the year will also see a detailed examination of China’s CPI and US ISM manufacturing statistics.

Frequently asked questions

1. Why are the prices of gold, silver, and oil affected by the situation in Venezuela?

A significant global shock has occurred with the abduction of Venezuela’s president. Any interruption raises questions about the world’s energy supply since Venezuela has the greatest proven oil reserves in the world. Because of supply risk, such uncertainty usually drives up oil prices while boosting safe-haven assets like gold and silver.

2. Despite solid fundamentals, why did gold and silver decline last week?

The CME’s stricter margin requirements, which compelled traders to unwind long positions, and profit booking after record rallies were the primary causes of the steep weekly drops in gold and silver. Rather than a shift in long-term demand, the retreat was technical.

3. To what extent does the impending US employment data affect markets?

Because it will affect expectations on Federal Reserve interest rates, the US employment data is crucial. While worse employment data might boost expectations of policy easing and support gold and silver prices, strong employment data would postpone rate reduction, increasing the currency and putting pressure on metals.

4. What levels should traders of MCX Gold keep an eye on this week?

The prices for immediate assistance are Rs 1,34,300 and Rs 1,33,200 per 10 grams. A recovery toward Rs 1,38,700 may result from holding above current levels. A persistent break below Rs 1,33,200 might pave the way for more declines.

5. Given the geopolitical uncertainties, would OPEC+ choices affect oil prices?

Indeed. Even if mood is now being driven by geopolitical issues, the January 4 OPEC+ meeting is still crucial. Oil prices may continue to be maintained if the group continues to halt supply increases, particularly if Venezuelan shipments are disrupted.

In conclusion

Following significant events in Venezuela, the first full trading week of 2026 is scheduled to start amid increased global tension. Due to concerns about supply interruption, this shock is expected to increase demand for gold and silver as safe havens and raise oil prices. However, as markets weigh geopolitical concerns against important economic data, central bank signals, and impending OPEC+ decisions, volatility is predicted to stay high. Sharp changes in commodities are something traders should be ready for.

Disclaimer

This article does not represent financial or investment advice; it is just meant to be informative. Before making any trading or investing choices, readers should speak with a skilled financial adviser due to the volatility of commodity markets.