Geopolitical shock in Venezuela may lift gold, silver and oil in first full week of 2026

MCX Gold futures began the week on Monday with a sharp decline, recording the steepest single-day fall of about 3.6 percent in the last two months

• Gold and silver surged early but retraced sharply as investors booked profits
• US captures Venezuela's president, boosting safe-haven demand and oil prices
• Base metals started the year strong; copper and aluminium hit multi-year highs

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Markets began the New Year on a mildly positive note following a volatile ride through 2025.

The US dollar held firm near 98.5 in the first trading session after a roughly 10 percent decline last year, while US equities edged higher on Friday, building on double-digit gains in 2025. On a weekly basis, the dollar strengthened amid weaker equity markets and stronger-than-expected economic data, including improved home sales, resilient home prices, a solid December Chicago PMI, and weekly jobless claims falling to a one-month low of 199,000.

Gold opened the year on a firm note, trading over 1 percent higher near $4,370 per ounce, extending its strongest annual performance since 1979. Silver rose more than 2 percent to around $73, driven by dollar softness, market deficits, and rising industrial demand. December FOMC minutes indicated growing openness to policy easing if inflation continues to moderate, though officials remain divided on timing and scale. Geopolitical tensions, including US enforcement on Venezuelan oil trade and renewed Russia–Ukraine strikes on energy infrastructure, added to safe-haven demand.

On a weekly basis, however, COMEX gold and silver retraced sharply as investors booked profits after exceptional rallies. Gold fell nearly 5 percent to below $4,330 per ounce, while silver dropped over 8 percent to around $71, retreating from a record high of $82.67. Higher margin requirements imposed by the CME also forced some long positions to unwind.

MCX Gold futures began the week on Monday with a sharp decline, recording the steepest single-day fall of about 3.6 percent in the last two months. Since this decline, prices have moved in a sideways range. If prices manage to hold above the immediate support levels of Rs 1,34,300 per 10 gram and Rs 1,33,200, a rebound toward Rs 1,38,700 is possible. However, a decisive break and sustained move below Rs 1,33,200 could lead to further correction.

Base metals started the year strongly, continuing year-end momentum amid volatile trading. Copper led gains, settling above $12,450 per tonne after testing record highs, while aluminium and zinc advanced over 1 percent, with aluminium breaking above $3,000 per tonne for the first time since 2022. Early strength was supported by sharp rallies on MCX and Shanghai exchanges, spilling over into the LME after holiday reopenings.

WTI crude oil opened 2026 positively and closed the week near $57.3 per barrel. Oil fell 20 percent in 2025, its largest annual drop since 2020, as oversupply concerns weighed on sentiment, although geopolitical risks from Venezuela and Russia triggered occasional price spikes. Markets now turn to the OPEC+ meeting on January 4, where the group is expected to maintain its decision to pause further supply increases. Geopolitical tensions remain elevated amid ongoing Russia–Ukraine strikes and increased pressure on Venezuela from the Trump administration.

Markets are likely to open sharply on edge Monday after US forces captured Venezuelan President Nicolás Maduro and his wife, charging them with drug trafficking following a major military operation on Saturday. The escalation marks a major geopolitical shock, likely to sharply boost safe-haven demand for gold and silver and push oil prices higher amid serious concerns over supply disruptions from a country holding the world’s largest oil reserves.

Traders will also watch the upcoming US jobs report for clues on monetary policy, following December FOMC minutes suggesting interest rates may remain unchanged for now. Markets are currently pricing in only a 17 percent chance of a January rate cut. US ISM manufacturing data and China’s CPI will also be closely monitored during the first full trading week of the year.