Commodity Insights

Commodity Outlook: Gold steady, Silver gains traction; Crude oil volatility persists

Gold prices traded in a narrow range near $4,450 per ounce, consolidating after a sharp 2.7% rally in the previous session driven by heightened geopolitical tensions. The rally was sparked by political developments in Venezuela following the capture of President Nicolás Maduro and subsequent uncertainty over governance, after US President Donald Trump indicated Washington’s intention to “run” the country and Delcy Rodríguez was sworn in as acting president. However, bullion prices paused as market attention shifted toward upcoming key US macroeconomic data.

Silver, meanwhile, continued to outperform, extending gains for a third straight session and trading nearly 2% higher around $78. The metal found support from a softer US dollar, rising safe-haven demand, and growing expectations of monetary easing. Dovish commentary from Federal Reserve officials, including Minneapolis Fed President Neel Kashkari, has reinforced expectations of rate cuts amid easing inflation and emerging labour market weakness. Markets are currently pricing in at least two US rate cuts this year, with Friday’s US nonfarm payrolls data seen as the next major trigger. Overall, gold retains a constructive near-term bias, supported by geopolitical risks and an accommodative Fed outlook.

Crude oil prices remained volatile but broadly capped. WTI crude hovered near $58.4 per barrel, stabilising after posting its strongest single-day gain in over a week. The spike was driven by a short-lived geopolitical risk premium following the Venezuela developments. While shares of US oil companies rallied on hopes of renewed activity in Venezuela’s energy sector, the broader supply-demand dynamics remain unfavourable. Venezuela now accounts for less than 1% of global oil supply, limiting the lasting impact of any disruptions. Rising global inventories, Saudi Arabia’s decision to cut crude prices to Asia for a third consecutive month, and Morgan Stanley’s forecast of a widening supply surplus through mid-year continue to weigh on sentiment. Upside in crude is likely to remain capped amid ongoing volatility.

Base metals extended their strong rally, with prices rising nearly 1%, while copper pushed above $13,120 per tonne, and COMEX copper touched fresh record highs. The move has been driven by tightening global supply conditions as uncertainty around potential US tariffs has redirected shipments toward the US, reducing availability in key hubs such as London and Shanghai. Supply risks have been further exacerbated by strike action at the Mantoverde mine. Strong demand from power grid upgrades, expectations of further Fed rate cuts, and sustained policy support from China keep the outlook for base metals skewed to the upside.

US natural gas futures continued to weaken for a fourth consecutive session, trading near $3.40 per mmbtu. Updated weather models point to milder winter conditions across much of the US during the first half of January, significantly reducing near-term heating demand and weakening the Q1 2026 demand outlook. While a shift toward colder conditions later in January could still spark a rebound, time is becoming a critical factor. If forecasts do not revive soon, further unwinding of bullish positions ahead of the March contract roll could keep prices under pressure.