Gold prices rose nearly 2.5% in European trading on Monday, extending gains for a second consecutive session, supported by strong demand for safe-haven assets after the United States carried out a complex military strike in Venezuela and arrested President Nicolás Maduro over the weekend.
The advance came despite a strong rise in the US dollar against a basket of major global currencies, ahead of the release of a highly important set of US economic data that is expected to provide strong clues on the Federal Reserve’s interest rate path this year.
Price Overview
• Gold prices today: Gold prices rose by around 2.5% to $4,434.50, from an opening level of $4,332.32, and recorded a low at $4,332.32.
• At Friday’s settlement, the precious metal gained 0.3%, marking its second advance in the past three sessions, as part of a rebound from a two-week low.
The US strike in Venezuela
US forces carried out a large-scale military operation early on Saturday, during which they arrested Venezuelan President Nicolás Maduro and his wife, Cilia Flores, and airlifted them to New York to face charges related to drug trafficking and terrorism.
Reports said the US strike resulted in civilian casualties. In the aftermath, Vice President Delcy Rodríguez announced she had assumed the presidency on an interim basis, while stressing that Maduro remains the country’s legitimate president.
The US dollar
The US dollar index rose by 0.25% on Monday, extending gains for a fourth consecutive session and reaching a four-week high of 98.49 points, reflecting continued strength in the US currency against a basket of global currencies.
The move comes as investors focus on a crucial set of US macroeconomic indicators due later this week, which are widely seen as key to shaping expectations for US monetary policy this year.
Minutes from the Federal Reserve’s December meeting showed a tendency among US policymakers to proceed cautiously in upcoming meetings, with some participants favoring keeping interest rates unchanged “for some time” following December’s rate cut.
US interest rates
• Anna Paulson, President of the Federal Reserve Bank of Philadelphia, said on Saturday that further rate cuts by central banks may take time after the aggressive easing cycle seen last year.
• According to the CME FedWatch tool from CME Group, markets currently price an 83% probability that US interest rates will remain unchanged at the January 2026 meeting, and a 17% probability of a 25 basis point rate cut.
• Investors are currently pricing in two US rate cuts over the course of next year, while the Federal Reserve’s own projections point to just one 25 basis point cut.
• To reassess these expectations, investors are later today awaiting the release of Institute for Supply Management data on US manufacturing activity for December.
Gold outlook
Tim Waterer, chief market analyst at KCM Trade, said events in Venezuela have revived safe-haven demand, with gold and silver among the main beneficiaries, as investors seek protection against geopolitical risks.
SPDR Gold Trust
Gold holdings at the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell by around 5.43 metric tons on Friday, bringing total holdings down to 1,065.13 metric tons, the lowest level since December 22.
www.economies.com