As global commodity markets set their sights on 2026, optimism particularly surrounds gold and silver. ANZ Bank’s Senior Commodity Strategist, Daniel Hynes, noted on January 14 that following strong performances in 2025, optimism prevails in precious metals. Increasing geopolitical tensions, debates about the US Federal Reserve’s independence, and concerns about the US’s fiscal discipline are encouraging funds to flow towards gold as a safe haven.
Silver Markets Under Pressure
Hynes emphasizes that tightening physical supply in the silver market is a major factor contributing to price volatility. While possible exemptions to US import tariffs may slightly ease supply pressures, the imbalance between supply and demand, along with strong industrial demand, are seen as establishing a solid foundation for silver prices. ANZ Bank predicts that gold prices could surpass $5,000 per ounce in the year’s second half.
Energy Markets and Geopolitical Risks
In the energy sector, geopolitical risks are becoming more pronounced. Oil prices have surged to their highest levels in two months, driven by US President Donald Trump’s intensifying rhetoric towards Iran. Trump’s open support for protests in Iran and the severing of all communications with the Tehran administration have raised the possibility of US intervention.
Potential supply disruption from Iran’s oil sector threatens up to 3.5 million barrels per day, with around 2 million barrels impacting global markets. Additionally, the US’s decision to impose a 25% tariff on countries trading with Iran has deepened supply concerns. Furthermore, adverse weather conditions in Kazakhstan, drone attacks, and maintenance issues have nearly halved exports from the Caspian Pipeline Consortium terminal.
In the natural gas sector, North Asian LNG prices are supported by increased demand expectations. A cold snap is expected to hit Northwest China, the Korean Peninsula, and Japan, strengthening demand prospects. China’s LNG imports increased by 8% annually in December, reaching 7.71 million tons; however, strong domestic production and pipeline gas deliveries may limit this growth. In Europe, geopolitical tensions related to Iran are raising future gas prices amid expectations of growing competition with Asia for LNG supplies.
On the other hand, lithium and other critical minerals gained value as G7 countries convened to address supply chain security. With France at the helm, topics such as minimum pricing and recycling quotas have supported the markets. Meanwhile, base metals are experiencing more cautious movements after a sharp rise earlier in the year, with aluminum retracting while copper remains near record levels. Conversely, tin attracts attention with an increase exceeding 3%.
Gold prices experienced a modest pullback from record levels following weak inflation data, although safe haven demand remains robust. The weaker-than-expected core inflation in the US boosts expectations of a potential Federal Reserve interest rate cut later in the year, but the strengthening dollar applies short-term pressure on gold. Silver continues trading at historic highs due to supply shortages, with heavy flows to US stockpiles causing a contraction in physical supply in the London market.
