Geopolitical turmoil has once again sent investors scrambling for safety, driving a sharp rally in precious metals. On Monday, January 5, 2026, gold and silver prices in India surged by over 1%, propelled by escalating tensions following a US military strike in Venezuela that led to the capture of President Nicolás Maduro.
Market Reaction: Bullion Prices Climb on Safe-Haven Demand
The immediate market reaction was pronounced. In the domestic spot market, gold of 999 purity closed at Rs 1,36,168 per 10 grams, a significant rise from its previous close of Rs 1,34,782. Similarly, silver (999 purity) ended at Rs 2,37,063 per kilogram, climbing from Rs 2,34,550 per kg on January 2. These figures, provided by the India Bullion and Jewellers Association (IBJA), translate to a gain of approximately 1.03% for gold and 1.07% for silver.
The futures market witnessed even stronger momentum. On the Multi Commodity Exchange (MCX), gold February futures rose 1.28% to Rs 1,37,499 per 10 grams. The move in silver was more dramatic, with March futures jumping 2.83% to Rs 2,43,000 per kg, after surging around 6% during intraday trading.
Global Ripples and Expert Commentary
The surge was not confined to Indian markets. Globally, spot gold advanced by 2% to around $4,415 per ounce, while silver also saw substantial gains. Economists directly linked the price movement to the unfolding crisis. Madan Sabnavis, Chief Economist at Bank of Baroda, noted, "Venezuela is now the hotbed of disruption... Gold and silver have gained which is again expected as they tend to react to any disturbance."
He further elaborated that while Venezuela's current share in global oil supplies is minimal, its vast known reserves could be a key attraction for external powers, heightening the stakes. This view aligns with a report from BMI, a unit of Fitch Solutions, which warned that the US's assertive foreign policy would heighten geopolitical risk in 2026. The report specifically highlighted that "the ousting of Maduro will heighten concerns in Iran in particular," potentially destabilizing other regions.
Broader Factors Supporting Precious Metals
Beyond the immediate geopolitical trigger, analysts pointed to other structural factors supporting prices, especially for silver. Satish Dondapati, VP & Fund Manager at Kotak Mutual Fund, stated, "Silver prices are trading close to all-time highs due to strong industrial and investment demand, ongoing supply concerns, and global geopolitical tensions." He also cited recent volatility from higher margin requirements by the CME Group and export restrictions from China as contributing factors.
The week ahead is also data-heavy for the United States, with key employment figures scheduled for release. Jateen Trivedi, VP Research Analyst – Commodity and Currency at LKP Securities, believes this could inject further volatility. "Overall sentiment remains positive, with gold expected to trade in a volatile range of Rs 1,36,500–Rs 1,40,000 in the near term," Trivedi concluded.
The events in Venezuela have served as a potent reminder of precious metals' traditional role as a safe haven during times of international uncertainty, setting the stage for a potentially volatile period in the bullion markets.
