In a major geopolitical escalation, the United States has initiated military strikes against Venezuela, as confirmed by multiple US media reports. Outlets including CBS News and Fox News, along with the AFP news agency citing unnamed Trump administration officials, have reported on the development, confirming the involvement of US forces.
Immediate Impact on Global Commodity Markets
Market experts are swiftly reacting to the news, anticipating a significant surge in key commodity prices when trading resumes. The escalation is expected to fuel uncertainty and trigger a gap-up opening for crude oil, gold, and silver.
Anuj Gupta, Director at Ya Wealth, stated that the US attack is likely to create geopolitical tension in the region, which will drive volatility. He forecasts a gap-up opening for a range of commodities including gold, silver, copper, crude oil, and gasoline.
Providing specific projections, Gupta noted that COMEX gold, which closed at $4,345.50 per ounce, could climb to $4,380 per ounce. Similarly, COMEX silver rates may reach levels between $75 and $78 per ounce. For crude oil, Brent prices are expected to test $62 to $65 per barrel.
Projections for Indian Domestic Markets
The ripple effects are also predicted for Indian commodity exchanges. On the MCX, gold prices may touch ₹1,40,000 per 10 gm, while silver could reach ₹2,45,000 per kg. Brent crude oil prices on the MCX are anticipated to hit ₹5,200 to ₹5,300 per barrel when markets open on Monday.
Explaining the rationale behind the surge in precious metals and oil, Sandeep Pandey, Co-founder of Basav Capital, pointed to immediate logistical disruptions. "The US-Venezuela crisis has jeopardised the sea route that Peru and Chad — the world's biggest silver exporters — use for their silver export. This is expected to create a supply shock," Pandey said. He added that similar upward pressure is expected on gold prices.
Limited Fallout Expected for Indian Equity Markets
Despite the anticipated commodity shock, analysts believe the direct impact on the Indian stock market will be contained. The consensus is that the Indian equity market is expected to remain largely stable. The reasoning is that Venezuela's economy is not large enough to create a massive global ripple effect that would severely destabilize Indian indices.
However, experts caution that the bullish sentiment may face some headwinds. The intense buying activity anticipated in the early morning session, following a robust Friday, might not materialize as strongly due to the new geopolitical overhang.
Sandeep Pandey of Basav Capital provided a nuanced view on sectoral impacts. "The Indian equity market is expected to remain stable. However, due to the rise in crude oil prices, we may see some downside impact on oil marketing companies (OMC) and related stocks. However, this downside will be limited, and oil stocks are expected to recover soon," he elaborated.
Disclaimer: This analysis is for informational purposes only. The views and recommendations are those of individual analysts. Investors are strongly advised to consult with certified financial experts before making any investment decisions.
