Global commodity markets are entering one of their most unstable periods in decades, according to a new analysis from Elev8 broker. The report examines how the escalation of the Iran–Israel conflict into direct military confrontation involving the United States may be reshaping two of the world’s most important markets: oil and gold.
Elev8 argues that the current environment is not simply another geopolitical shock. Instead, it may represent a structural break in the mechanisms that have supported global energy trade, U.S. Treasury demand, inflation expectations, and safe-haven flows for decades.
The Oil Scenario: Pressure on the Petrodollar Cycle
At the center of Elev8’s oil scenario is the potential weakening of the traditional oil-based dollar system that has operated since the 1970s. Under that arrangement, higher oil prices boosted revenues for Gulf energy exporters, which then recycled dollar earnings into U.S. Treasury bonds. That flow helped finance the U.S. budget deficit and supported lower U.S. interest rates.
The current crisis may be disrupting that mechanism. Elev8 notes that conflict-related pressure on Persian Gulf energy infrastructure is forcing regional countries to spend reserves on rebuilding production facilities, oil refineries, LNG terminals, and alternative supply routes.
At the same time, major oil importers such as China, India, and Japan have reduced holdings of U.S. long-term debt to defend their currencies during the oil-driven inflation shock. The result is a market dynamic that looks different from previous crises: instead of Treasury yields falling during a flight to safety, yields have risen.
Investor Takeaway
Oil Price Forecasts Remain Highly Uncertain
Oil price projections for 2026 vary widely, reflecting the unusual uncertainty surrounding supply disruption, sanctions policy, infrastructure damage, and the duration of the conflict.
Elev8 highlights several external forecasts. Citi projected Brent crude could average $120 per barrel over the next three months, while raising quarterly forecasts to $110, $95, and $80 for the second, third, and fourth quarters, respectively. Morgan Stanley expects oil prices to range between $100 and $110 per barrel in 2026.
The IMF’s pessimistic scenario, published on 14 April 2026, suggested oil prices could rise by 80% above the January baseline from the second quarter onward. Meanwhile, a March survey of 38 economists and analysts produced a weighted average Brent forecast of $82.85 per barrel for 2026, nearly 30% higher than the February estimate.
The wide range of forecasts reflects the real issue: the longer the conflict continues, the greater the risk of energy infrastructure damage, supply disruption, and inflation pressure.
Gold’s Paradox: Resilient, But Not Yet Surging
Gold’s behavior is more complicated. In a normal geopolitical shock, investors might expect the metal to rally sharply. Elev8 notes that the surprise is not that gold has failed to rise dramatically, but that it has not fallen.
The report suggests that some countries that would normally buy gold may be redirecting resources toward urgent purchases of petroleum, refined oil products, and fertilizers. Some may even be selling gold to finance these needs.
Despite this temporary pressure on demand, gold prices have remained resilient. Elev8 interprets this as evidence of strong underlying support that may reemerge once the petroleum market stabilizes.
Investor Takeaway
Gold Forecasts Point to Stronger Second-Half Potential
Several major banks expect gold to move higher in the second half of 2026, according to the report.
Goldman Sachs has raised its year-end forecast to $5,400 per ounce, citing increased private-sector allocations and continued central bank demand. JPMorgan expects gold to reach $6,300 per ounce by the end of 2026, driven by central bank and investor demand.
Morgan Stanley expects gold to reach $5,200 per ounce by year-end, supported by geopolitical risk, sustained central bank purchases, and renewed investor inflows. Wells Fargo Investment Institute raised its target range to $6,100–$6,300 per ounce, citing potential dollar devaluation and other macroeconomic factors.
These forecasts suggest that gold’s next move may depend less on immediate panic buying and more on monetary policy, inflation expectations, central bank reserve diversification, and the timing of any easing cycle.
Monetary Policy and Dedollarisation
Elev8 identifies monetary policy as one of the key drivers for gold in 2026. If recession risks increase, central banks may eventually cut rates or return to quantitative easing. That could support gold by weakening real yields and raising concerns about renewed inflation.
However, the current environment is not the same as the COVID-19 recession. Elev8 notes that 2020 was primarily a demand-driven shock, while today’s risks are more supply-driven. If inflation remains elevated because of energy disruption, central banks may keep policy rates high for longer, which is usually less favorable for precious metals.
The report also links gold demand to dedollarisation. Since the freezing of some sovereign assets in 2022, some emerging-market central banks have had stronger incentives to diversify reserves away from the U.S.-centric financial system. Elev8 notes that emerging-market gold holdings remain far below those of developed economies, suggesting further room for accumulation.
Investor Takeaway
Elev8’s Three Scenarios for 2026
Primary Scenario
In Elev8’s primary scenario, Brent crude trades between $90 and $110 per barrel, assuming the conflict remains low-intensity and partial supply disruptions are offset by temporary sanctions relief. The petrodollar cycle begins to recover, but remains below its pre-crisis strength.
Gold trades between $4,800 and $5,400 per ounce, supported by a Federal Reserve easing cycle in the second half of the year and continued central bank reserve diversification.
Escalation Scenario
In the escalation scenario, Brent crude rises to $120–$150 per barrel if the Strait of Hormuz faces a long-term blockade and energy infrastructure across the Persian Gulf comes under direct attack. Asian consumers may be forced to pay for supplies in alternative currencies, accelerating dedollarisation.
Gold could rise to $5,700–$6,500 per ounce if the Federal Reserve, European Central Bank, and Bank of Japan launch new quantitative easing programs in response to recession risk and rising government debt.
De-escalation Scenario
In the less likely de-escalation scenario, Brent crude falls to $75–$85 per barrel by year-end, supported by a diplomatic settlement, sanctions relief, and restoration of Iranian oil exports.
Gold corrects to $4,000–$4,500 per ounce as geopolitical risk declines and the dollar strengthens. However, dedollarisation and central bank purchases may limit the downside.
Conclusion
Elev8 concludes that 2026 may become one of the most challenging years for the 50-year-old petrodollar system. The report argues that the petrodollar arrangement has always been a political arrangement disguised as a financial system, and that changes in the geopolitical environment are now beginning to alter the financial architecture built around it.
For gold, the picture is paradoxical. The current crisis has not yet triggered a dramatic surge, but it may have created the conditions for stronger medium-term demand. Once oil-related funding pressure eases and monetary stimulus becomes more likely, pent-up demand for gold could return.
The key message from Elev8 is that oil and gold should not be analyzed separately in 2026. They are connected through inflation, Treasury markets, reserve diversification, central bank policy, and the changing structure of global finance.
Disclaimer: This article does not contain or constitute investment advice or recommendations and does not consider your investment objectives, financial situation, or needs. Any actions taken based on this content are at your sole discretion and risk. Elev8 does not accept liability for any resulting losses or consequences.
About Elev8
Elev8 is a global broker offering a trading ecosystem with a wide range of instruments, analytical and educational tools, integrated AI solutions, and responsive customer support. The company also supports charitable and humanitarian initiatives worldwide.
