Maduro episode jolts global markets, gold rallies
Gold prices jumped to a more than one-week high on Monday, moving closer to record levels, as geopolitical tensions triggered by the reported US capture of Venezuelan President Nicolás Maduro drove investors toward safe-haven assets.
Spot gold rose 2.3 per cent to $4,430.27 an ounce by 1123 GMT, its highest level since December 29. The metal last touched a record peak of $4,549.71 on December 26.
“Gold is benefiting from the US-Venezuela escalation over the weekend,” said Zain Vawda, analyst at MarketPulse by OANDA. “It has boosted demand for safe-haven assets at a time when markets are already dealing with multiple uncertainties.”
US President Donald Trump said on Sunday that Washington could order further military action if Venezuela fails to cooperate with US efforts to open up its oil industry and curb drug trafficking. He also warned that Colombia and Mexico could face military action if they do not reduce the flow of illicit drugs into the United States.
According to analysts, the remarks have added to investor unease. “The administration’s comments on Mexico following the Venezuela operation have raised questions about future US actions in Latin America, which is likely to keep gold demand elevated in the near term,” Vawda said.
Gold surged about 64 per cent last year, marking its biggest annual gain since 1979. The rally was fueled by US Federal Reserve rate cuts, persistent geopolitical tensions, strong central bank purchases and rising holdings in gold-backed exchange-traded funds.
Investors are now looking to December’s US non-farm payrolls data, due on Friday, for further signals on the direction of monetary policy. Markets are currently pricing in at least two US interest rate cuts this year.
Other precious metals also posted strong gains. Spot silver climbed 3.9 per cent to $75.42 an ounce, after hitting a record high of $83.62 on December 29. Silver soared 147 per cent last year, supported by its designation as a US critical mineral, ongoing supply shortages and robust industrial and investment demand.
Spot platinum rose 3.1 per cent to $2,208.62 an ounce, having touched a record $2,478.50 a week earlier, while palladium gained 2.3 per cent to $1,676.12.