Venezuela, OPEC+ and the Fed: political tensions, steady output and expected rate cuts push precious metals higher
Geopolitical crises and markets: oil stalls, gold soars
Venezuela, OPEC+ and the Fed: political tensions, steady output and expected rate cuts push precious metals higher
Geopolitical tensions in South America are back at the center of global markets after the United States captured Venezuelan President Nicolás Maduro. U.S. President Donald Trump said Washington would take control of the country until a transition to a new administration becomes possible, without clarifying how or when this would occur. The event has reignited uncertainty in a region that is crucial to global energy markets and has added to volatility already fueled by conflicts and political instability elsewhere.
Venezuela, which holds the world’s largest oil reserves—greater even than those of Saudi Arabia—remains far from a rapid recovery in production. Years of mismanagement and sanctions have caused output to collapse, and analysts say a meaningful increase in production is unlikely for many years, even if major U.S. oil companies were to invest the billions promised by Trump.
Against this backdrop, OPEC+ has opted for caution. The expanded cartel kept oil production unchanged after a brief online meeting on Sunday, avoiding open discussion of the political crises affecting several member countries, including Venezuela. The eight countries involved—Saudi Arabia, Russia, the United Arab Emirates, Kazakhstan, Kuwait, Iraq, Algeria and Oman—produce about half of the world’s oil.
The decision follows a difficult 2025 for crude markets: oil prices fell by more than 18% over the year, the steepest annual decline since 2020, fueling concerns about oversupply. Despite this, the same eight countries had raised production targets by around 2.9 million barrels per day in 2025—nearly 3% of global demand—in an effort to regain market share. In November, however, they agreed to pause further increases during the winter months due to weaker demand in the Northern Hemisphere. The next meeting is scheduled for February 1.
On the geopolitical front, OPEC+ is also grappling with other fault lines: tensions between Saudi Arabia and the UAE linked to the conflict in Yemen, falling Russian oil exports due to U.S. sanctions over the war in Ukraine, and the situation in Iran, marked by domestic protests and U.S. threats of intervention.
While oil remains under pressure, precious metals continue to benefit from global uncertainty. In the first trading session of the new year, gold, silver and platinum consolidated their extraordinary gains from 2025, supported by both geopolitical tensions and expectations of looser U.S. monetary policy.
Spot gold held steady around $4,313 an ounce after reaching an intraday high of $4,402. The yellow metal hit a record high of $4,549 an ounce on December 26 and closed 2025 up 64%. U.S. gold futures for February delivery edged slightly lower, settling at $4,329 an ounce.
Markets are pricing in at least two quarter-point interest rate cuts by the Federal Reserve this year, a scenario that boosts the appeal of non-yielding gold. “Right now, markets are being driven less by supply-and-demand fundamentals and more by political uncertainty,” analysts note, pointing to tariffs, U.S. public debt and geopolitical risks as forces lifting the entire metals complex.
Silver and platinum have also posted exceptional performances. Spot silver rose to $71.77 an ounce after hitting a record high of $83.62, while platinum climbed above $2,125 an ounce after reaching an all-time high of $2,478. In 2025, silver surged more than 147%, supported by its designation as a critical mineral in the United States, supply shortages and low inventories, while platinum gained 127%.
Palladium also ended the year strongly, posting a 76% rise—the biggest gain in 15 years—and started the new year above $1,636 an ounce.
After the year-end rally, all precious metals are showing signs of short-term profit-taking. But with oil constrained by political divisions and gold supported by crises and expected rate cuts, markets remain more than ever at the mercy of geopolitics.
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