How is US-Venezuela conflict reshaping gold, silver demand

Nowlan expects the frenetic pace of share deals in the mining sector to persist in 2026, at least to start.

• Gold and silver prices surged after US attack on Venezuela, hitting record highs
• Prolonged US-Venezuela tensions may boost gold demand into 2026
• Silver remains volatile but could outperform if geopolitical risks persist

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Prices of precious metals have climbed steadily since the US military action against Venezuela on January 3. Gold traditionally benefits from geopolitical stress due to its status as a safe-haven asset.

Gold has gained nearly 4 percent, while silver has surged close to 14 percent, marking a record performance on January 6.

On that day, Comex spot gold touched an all-time high of $4,500, while silver peaked at $82.215 per ounce. Similarly, the MCX futures price of gold surged to Rs 1,40,465 per 10 grams, while silver touched the record Rs 2,59.322 per kilogram.

If tensions increase and the US escalates through a further military strike on Venezuela, it would create another significant geopolitical shock. Although the tiff between the two countries has been ongoing for a long time, the analyst says that the protracted conflict would therefore impact investor behaviour and influence gold and silver well into 2026.

"Given Venezuela’s strategic role in energy markets and its alliances with non-Western powers, such as China, the conflict could accelerate central bank and institutional demand as investors seek protection against currency volatility, sanctions risk, and potential disruptions to global trade," said Ross Maxwell, Global Strategy Operations Lead, VT Markets, an online trading platform.

How significant could the US-Venezuela conflict boost gold demand?

Speaking in similar lines, Manav Modi, Commodities Analyst at Motilal Oswal Financial Services Ltd, said that the recent US military action in Venezuela has once again reignited safe-haven flows into gold and silver as investors price in uncertainty and potential supply shocks.

"Gold has climbed toward multi-year highs, reflecting its traditional role as a hedge amid geopolitical risk, dovish rate expectations, and a softer dollar. The conflict’s intersection with broader power dynamics—especially concerns about Venezuela’s role in oil markets and any challenges to the petro-dollar paradigm—adds to its market significance," said Modi.

The analyst thinks that this doesn’t necessarily signal a simple short-term spike only. If tensions persist, along with other countries also getting involved and with broader macro uncertainties, gold’s appeal could extend into 2026 as a strategic portfolio anchor.

How might silver respond amid prolonged US-Venezuela conflict?

Maxwell thinks that the impact on silver would be more complex. In the short term, rising uncertainty would mean that silver will likely move higher alongside gold, but its position linked to strong industrial demand means that prolonged instability or a slowdown in global growth could weigh on its price relative to gold.

Silver is uniquely positioned in this environment because of its safe-haven appeal as well as structural industrial demand across solar energy, electric vehicles, power infrastructure and electronics.

Modi, however, cautions that silver is likely to remain more volatile than gold, but that volatility is increasingly skewed to the upside, making it a potential outperformer if geopolitical tensions persist into 2026.

"Even if global growth softens temporarily, governments continue to accelerate clean-energy and electrification investments, keeping underlying demand resilient. Supply constraints, low inventories and its classification as a strategic mineral in the US further strengthen its medium-term outlook," said Modi.

Gold and silver outlook in 2026 amid geopolitical uncertainty

If the US-Venezuela tension continues through 2026, it could push countries to rely less on the US dollar and diversify their foreign exchange reserves. This shift, in turn, could benefit gold as central banks often increase gold holdings when the dollar weakens.

"Looking toward 2026, sustained tensions involving the US could reinforce the broader trend of de-dollarisation and diversification of reserves, again supporting higher gold prices. Inflationary pressures stemming from energy supply disruptions or expanded defence spending could further enhance gold’s appeal as an inflation hedge," said Maxwell.

The analyst summarised that the US attack on Venezuela would likely be another bullish catalyst for gold through 2026, while silver could experience higher volatility, balancing its safe-haven role against global growth and industrial demand.