Robin J Brooks estimated that a 10% rise in front-month Brent futures would coincide with a 4% fall in gold and an 8% fall in silver, while cautioning that the calculation may overstate how far both metals could fall.
For that scenario, Brooks used oil and metals price movements from the second half of October, concentrating on the final two weeks, when gold and silver were especially weak. He said the shorter window yields a stronger oil sensitivity than the broader pattern, making the estimate an approximate upper bound for potential losses. The percentages are conditional estimates; Brooks did not say the oil move was certain.
His post followed heavy losses in both metals on Friday. Brooks put gold’s decline at 3.7%, saying it had fallen meaningfully below 4,000 for the first time this year; silver lost 5.9%. He cited charts of 30-day rolling correlations between daily Brent price changes and daily gold and silver returns, which he said have remained stable lately. Brooks said oil spikes have coincided with losses in both metals since the Iran war began. He said precious metals could recover after the period of greatest uncertainty ends. The relationship also featured in earlier EconoTimes coverage of silver’s decline during an oil surge.
Brooks described Persian Gulf exports as back to prewar levels, while Brent was back at earlier highs reached during the Strait of Hormuz closure. He put Brent’s fair value at about $90 a barrel, using the December 2027 futures contract as a benchmark. In his view, Brent’s hot-war risk premium exceeds $25 a barrel. He considered a sustained 10% rise in Brent unlikely given that premium.
Brooks said the fighting’s start in February 2026 caught markets by surprise, while renewed aerial bombing is widely anticipated. He argued that gold and silver are therefore less likely to repeat their early-2026 losses.
