Gold prices surged on Tuesday, reaching a one-week peak driven by Federal Reserve officials’ dovish remarks, which heightened expectations for interest rate reductions. Additionally, escalating tensions in Venezuela fueled a surge in safe-haven demand for the precious metal.
At 0722 GMT, spot gold climbed by 0.4 percent to $4,463.63 per ounce, following a substantial 3 percent increase in the previous session. Last year, gold hit a historic high of $4,549.71 on December 26, marking a remarkable 64 percent surge, its strongest annual performance since 1979.
Meanwhile, US gold futures for delivery in February advanced by 0.5 percent to $4,473.90.
Ilya Spivak, Tastylive’s head of global macro, noted, “(Federal Reserve officials’ comments) were supportive, but the fundamental outlook appears largely unchanged. This week holds significance with the impending jobs report on Friday.”
Minneapolis Fed President Neel Kashkari expressed concerns on Monday about inflation stabilizing slowly and raised the possibility of a rise in the unemployment rate, potentially leading to a rate cut.
Market participants are currently anticipating at least two interest rate cuts this year and are closely monitoring the upcoming nonfarm payroll report scheduled for release on Friday for further guidance on monetary policy.
Following the capture of Venezuelan President Nicolas Maduro on narcotics charges by US President Donald Trump, Maduro pleaded not guilty on Monday. This event has caused disruption among global leaders and officials in Caracas as they strive to regroup amidst the escalating tensions.
Spivak highlighted, “Maduro’s capture underscores the strained relations between the US and China, reflecting the broader trend of de-globalization.”
Assets that do not yield interest typically perform well in environments characterized by low interest rates and periods of economic or geopolitical uncertainty.
In the same vein, spot silver surged by 2.8 percent to $78.64 per ounce, hitting an all-time high of $83.62 on December 29. Silver wrapped up 2025 with exceptional gains of 147 percent, significantly outpacing gold and marking its most successful year on record.