Eric Sepanek
SBC Founder
Eric Sepanek is the founder of Scottsdale Bullion & Coin, established in 2011. With extensive experience in the precious metals industry, he is dedicated to educating Americans on the wealth preservation power of gold and silver.
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Commodity markets are becoming harder to predict as geopolitical conflict, resource competition, technological disruption, and monetary shifts undermine traditional models. Citi Research warns these forces could make black swan events more frequent and disruptive.
These developments are especially consequential for precious metals investors, given gold’s traditional safe-haven role during periods of uncertainty and silver’s growing exposure to industrial demand, competition from critical minerals, and AI expansion.
Why Commodity Markets Have Become Harder to Predict
For decades, commodity analysts were able to explain price movements using a relatively simple framework of supply and demand, above-ground inventories, and broader economic indicators.
In a recent report, Citi Research warns that this long-reliable schema is too simplistic given the increasingly complicated commodities space.
Analysts argue that conventional economic models fail to capture other forces increasingly influencing commodities, including:
- Geopolitical conflicts and trade disputes
- Competition for strategic natural resources
- Government stockpiling of critical minerals
- Climate-related supply disruptions
- Rapid technological change, including AI
- Central bank gold purchases and de-dollarization
- Fiscal and monetary policy shifts
- National security concerns reshaping global supply chains
Black Swan Events Become More Frequent
Another alarming prediction in Citi’s report is the increasing frequency of black swan events. Commodities analysts usually break out their forecasts into bearish and bullish possibilities.
The predictions carrying the lowest likelihood, yet the most transformative impact, are usually called black swan scenarios. Known as tail-risk analysis, this process looks at how markets would respond if an unlikely, yet plausible, event suddenly disrupted the global economy.
In the past few years alone, commodity markets have faced a steady stream of extreme shocks and unexpected developments, including:
- The COVID-19 pandemic
- Russia’s invasion of Ukraine
- Escalating trade disputes
- Repeated conflicts in the Middle East
- Record central bank gold purchases
- Persistent inflation and aggressive interest rate hikes
Citi analysts believe these tail-risk events are occurring with greater frequency, prompting commodity analysts to place more emphasis on stress testing and encouraging investors to prepare for a wider range of possible market outcomes.
This prediction echoes the International Monetary Fund’s conclusion in its Global Financial Stability Report. In the report, the global monetary organization found that geopolitical risks, including wars, trade restrictions, diplomatic tensions, and terrorism, have increased sharply since 2022 and pose a growing threat to global financial stability.
Three Standout Tail-Risk Scenarios
In addition to predicting an acceleration of black swan events, Citi highlighted three developing tail-risk scenarios with the potential to reshape commodity markets:
Extended Middle Eastern Tensions
According to the bank, a prolonged escalation in the Middle East is the most pressing risk facing the global commodities market. The Strait of Hormuz represents a choke point on the world economy, in which extended disruptions can wreak havoc.
About one-fifth of liquefied natural gas flows through this channel, but Citi says the biggest threat is the downstream economic effects of exorbitant oil prices, including rising inflation, monetary policy shifts, and demand for safe-haven assets.
Global Race to Secure Critical Minerals
In a world increasingly dominated by diplomatic tensions, trade disruptions, natural disasters, and outright conflict, governments are taking a more proactive approach to commodity management.
Citi notes that countries are beginning to officially recognize various commodities as critical minerals rather than ordinary industrial commodities. For example, silver was recently added to the U.S. Critical Minerals list. Analysts suggest these official moves could tighten supplies, reduce trade, and elevate prices.
AI Boom Reshapes Commodity Demand
Citi is one of a growing number of Wall Street insiders saying that the stock market’s warning signs are getting harder to ignore. The artificial intelligence boom is transforming stock evaluations, but the technological shift is also impacting how core commodities are priced and traded globally.
If AI demand continues to accelerate, private companies and governments will increase their consumption of key commodities, such as silver, copper, and energy. Interestingly, Citi believes gold could benefit from either an AI boom or bust. Continued expansion could intensify concerns about capital spending, energy demand, and government support, while a collapse could drive investors toward safe-haven assets.
Citi Remains Bullish on Gold Over the Long Term
Citi’s warning that black swan events could become more frequent may have major implications for commodity prices—from oil and natural gas to copper and wheat—for decades to come. Governments are increasingly restricting access to strategic resources, expanding domestic stockpiles, and treating commodity security as a matter of national security.
Gold and silver occupy a unique position within this changing landscape. Like other commodities, their prices respond to supply, demand, trade restrictions, and broader economic conditions. However, they are also widely held as investments designed to protect from the very volatility, instability, and uncertainty Citi says are becoming more prevalent.
While acknowledging gold’s short-term headwinds—including higher-for-longer interest rates and a stronger U.S. dollar—Citi analysts remain bullish on its longer-term outlook. They point to powerful underlying trends such as record central bank purchases, towering government debt, and global de-dollarization.
Citi believes these forces could eventually push gold to $6,000/oz in the near term, which falls in line with the market’s broad 2026 gold price predictions.
For investors looking to weather this more volatile, unpredictable environment, this outlook adds one more reason gold continues to warrant a place in a diversified portfolio.