The potential resolution of the Ukraine conflict is casting a shadow over the geopolitical risk premiums that have buoyed oil and gold prices. Recent developments, including the resignation of Serbian Prime Minister Milos Vucevic and the diplomatic overtures between Ukrainian President Volodymyr Zelenskiy and US President Trump, suggest a shift in the geopolitical landscape. These changes, coupled with China's Xi Jinping moving towards more amicable relations with the US, indicate a possible de-escalation of tensions that have historically supported commodity prices.
As geopolitical risks diminish, the urgency to hold commodities like oil and gold may decrease, potentially leading to a decline in their prices. The possibility of additional US sanctions on countries buying Russian oil could further impact global supply channels, influencing oil prices based on how supply adjusts. Meanwhile, gold, traditionally a safe-haven asset, might experience reduced demand as global tensions ease, affecting its market value.
As of 15:01 on January 28, oil prices are at $73.87, reflecting the market's response to these evolving geopolitical dynamics. The price is slightly up from the last close of $73.17, with an intraday high of $74.31, as investors weigh the potential impacts of these geopolitical shifts on future commodity demand.