Oil, Gold Prices Jump on Global Uncertainties

A 3D printed oil pump jack is seen in front of displayed stock graph and OPEC logo in this illustration picture on April 14, 2020. Dado Ruvic/Illustration/Reuters

Gold and oil prices jumped in early trade on Monday following heightened geopolitical tensions in the Middle East.

Spot gold opened at around $2,640 per oz. on Monday and was trading at $2,661 as of 2:15 p.m. EST, up nearly 0.8 percent. Brent crude oil futures, which opened at $71.22 per barrel, were trading at $72.23, an increase of over 1.4 percent. Oil prices had dropped for three consecutive days until the trend was reversed on Sunday. Over the weekend, a group of rebels in Syria seized the capital, complicating the security situation in the Middle East, which is already fragile amid the Israel-Gaza conflict.

Hayat al-Tahrir al-Sham (HTS), designated as a terrorist group by the United States, captured the cities of Homs, Hama, and Aleppo. Abu Mohammed al-Golani, head of the HTS, said he wants to make Syria “a beacon for the Islamic nation.” The country’s former president, Bashar al-Assad, fled to Russia.

Concerns that the events in Syria could spill over into neighboring oil-producing nations pushed up Brent crude prices and boosted the safe-haven demand for gold.

The recent decision of OPEC+ to delay ending its voluntary production cuts is also having an impact on oil markets. Ongoing cuts result in the market being undersupplied by 2.2 million barrels per day of oil.

ING Bank pointed out that this move reduces the scale of the oil surplus expected for the next year. OPEC+ members are expected to fully restore the 2.2 million barrels of daily supply by September 2026.

“While the action taken by OPEC+ may potentially provide a higher floor to the market than previously expected, ultimately, the group will still have to accept lower prices,” ING said. “OPEC+ faces the ongoing issue of growing non-OPEC supply and disappointing demand growth, largely due to China.”

Recent financial data from Beijing showed new bank loans declining and outstanding total social financing—credit flows into the economy from the financial market—at a record low. The data suggests the country’s economic woes might extend into next year.

ING Bank said it previously forecast ICE Brent to average $69/bbl over 2025. After OPEC+ delayed ending its voluntary production cuts, it raised the projection to $71/bbl.

“The fact that the market will still be in surplus means that there is still a downside in prices from current levels, particularly in 4Q25,” it said.

As for gold, a recent JP Morgan report sees a “strong case for a continued gold rush” next year. Gold can help create more “resilient portfolios,” the organization said.

JP Morgan expects strong central bank gold buying to continue supporting gold prices. It also sees the U.S. dollar as “structurally overvalued.” As such, gold will help diversify any investment exposure to the dollar.

Saxo Bank predicts gold to hit a “fresh record high”—or roughly $3,000 per oz.—next year.

“Expectations for persistent global uncertainties are driving demand for gold as a safe-haven asset, supported by lower interest rates and continued central bank demand,” the bank said.