Gold prices surged to a one-week high on Tuesday, driven by increased bets on interest rate cuts by Federal Reserve officials and rising tensions in Venezuela. The precious metal’s value rose 0.5% to $1,469.96 per ounce as of 0534 GMT, following a nearly 3% increase in the previous session. This upward trend is a continuation of gold’s strong performance, which saw it reach a record high of $1,549.71 on December 26 and achieve its best annual performance since 1979 with a 64% jump.
US gold futures for February delivery also saw a 0.7% increase, rising to $1,481.30. The market’s expectations of at least two rate cuts this year have been influenced by the upcoming nonfarm payroll report, scheduled for release on Friday, which is anticipated to provide further cues on monetary policy.
The recent developments in Venezuela have also contributed to the increased demand for gold, as investors seek safe-haven assets amidst uncertainty. The country’s ousted President Nicolas Maduro pleaded not guilty to narcotics charges on Monday, following his capture by US President Donald Trump’s administration, which has sent shockwaves globally.
In related news, silver and platinum prices have also experienced significant gains. Spot silver rose 3.5% to $17.92 per ounce, having reached an all-time high of $18.62 on December 29, and ending 2022 with a 47% annual gain. Spot platinum increased 2.8% to $934.25 per ounce, after reaching an all-time high of $1,018.50 last Monday.
The surge in precious metal prices can be attributed to a combination of factors, including the weakening US dollar, geopolitical tensions, and expectations of a more dovish monetary policy stance from the Federal Reserve. As investors continue to monitor global events and economic indicators, the demand for safe-haven assets is likely to remain strong, supporting the upward trend in gold and other precious metals.
The upcoming nonfarm payroll report is expected to provide further insight into the US economy and potentially influence the Federal Reserve’s decision on interest rates. Meanwhile, the situation in Venezuela remains uncertain, and any further developments are likely to impact the global markets and precious metal prices. As the global economic landscape continues to evolve, investors will be closely watching the movements in gold and other precious metals, seeking to capitalize on potential opportunities and hedge against uncertainty.
