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 signals from Ukrainian President Volodymyr Zelenskiy and US President Trump about ending the conflict, suggest a shift in the geopolitical landscape. This shift could diminish Russia's leverage and reduce the urgency for holding commodities as hedges against geopolitical instability.
As geopolitical tensions ease, the demand for commodities like oil and gold, traditionally seen as safe havens, may decrease. The potential for additional sanctions on countries buying Russian oil could also impact global supply channels, further influencing oil prices. Improved relations between major global powers, such as China and the US, are likely to stabilize markets, reducing the need for hedges like gold.
The current price of Brent crude oil (CO1) stands at $76.54 as of 15:01 on January 28, reflecting a slight increase from its last close of $76.18. The market remains sensitive to geopolitical developments, with the day's trading range between $75.89 and $77.16.