Markets on Edge: Gold Rallies on US Military Maneuvers; Oil Ignores Venezuela Shock

LONDON/NEW YORK — Geopolitical risk premiums returned with a vengeance this week, driving a wedge between commodity classes. While Gold (XAU/USD) surged to a one-week high near $4,474/oz on safe-haven flows, Crude Oil markets remained surprisingly tepid despite a potential regime change in Venezuela, highlighting the market's obsession with supply gluts over geopolitical disruptions.

Gold Bids on Military Escalation

Alert levels in trading desks spiked following reports of significant US military mobilization. Open-source intelligence confirmed at least ten C-17 Globemaster transport aircraft—some departing from the 160th Special Operations Aviation Regiment's base—transiting to Europe. This coincides with reports of heightened alert status within the Iranian armed forces and US monitoring of the tanker “Bella-1” in the North Atlantic.

Simultaneously, the US detention of Venezuelan President Nicolás Maduro has escalated tensions in the Western Hemisphere. The appointment of Senator Marco Rubio to lead the Venezuela transition team signals a hardline US stance, further fueling the “fear trade.”

XAU/USD has broken technical resistance, driven by this confluence of risks. As long as the ambiguity regarding US military objectives in Europe and the stability of the Venezuelan transition remains, the yellow metal retains a strong fundamental bid.

The Oil Paradox: Why WTI isn't Rallling

Despite the political earthquake in Caracas—a holder of the world's largest proven oil reserves—WTI Crude hovered near $60.34, while Brent struggled at $64.30. The muted reaction underscores a bearish structural reality: the world is awash in oil.

Analysts at ING and UBS note that Venezuela‘s capacity is largely “paper barrels.” Decades of underinvestment mean that even if the US moves to rebuild the sector, significant supply increases are years away. President Trump’s assertion that US companies could revitalize Venezuelan output in “18 months” clashes with industry estimates, which project a timeline of up to a decade and capital expenditures exceeding $100 billion.

Consequently, the market views the Venezuela situation not as a supply shock, but as a potential—albeit distant—source of more supply in an already oversupplied 2026 market. Without a direct disruption to Middle Eastern flows, the geopolitical risk premium in oil remains negligible.