Precious metals prices surge: geopolitical risks boost demand for safe-haven assets

Source: BlockMedia Original Title: Gold Surges 2.7%…Reaches New Highs Amid Venezuela Uncertainty Original Link: https://www.blockmedia.co.kr/archives/1028660 In the New York gold market, prices rose by 2.7%, reaching the highest level in the past week. Over the weekend, the U.S. arrested Venezuelan President Maduro, sparking geopolitical risks and increasing demand for safe-haven assets, which pushed gold prices higher.

According to trading data, spot gold rose to $4,444.24 per ounce, briefly touching $4,444.52 during the session, a new high since the 29th of last month, approaching the record high of $4,549.71 set on the 26th of last month. U.S. gold futures for February also surged by 2.8%, reaching $4,451.5. Market assessments suggest that gold has completed a short-term correction and has re-entered a strong upward trend.

Gold trader Alexander Jumpe stated that the situation in Venezuela has reactivated demand for safe-haven assets. The existing geopolitical risks, energy uncertainties, and expectations of rate cuts are working together to further strengthen the upward momentum in the gold market.

The immediate catalyst for this rally was the U.S. military intervention in Venezuela. Last weekend, U.S. forces suddenly arrested President Maduro, and President Trump warned that if Venezuela does not cooperate in opening its oil industry and cracking down on drug trafficking, the U.S. may conduct additional airstrikes. Similar pressure on Colombia and Mexico indicates that geopolitical risks are spreading across Central and South America.

This situation traditionally increases the attractiveness of physical safe-haven assets like precious metals. Especially in the context of the Federal Reserve beginning rate cuts at the end of last year and market expectations of two more cuts this year, gold has relatively high investment appeal in a low-interest-rate environment.

Not only gold, but other major precious metals also rose in tandem. Silver prices increased by 5.2% to $76.37 per ounce. Over the past year, silver has gained up to 147%, making it the best-performing precious metal. The U.S. government’s designation of strategic minerals and expectations of structural supply shortages have heightened market concerns over supply and demand imbalances.

Platinum rose by 5.9% to $2,269.55, and palladium increased by 3.4% to $1,694.75, reflecting a combined response to geopolitical risks and industrial demand expectations.

The market is currently open to the possibility of further increases in gold prices. Jumpe noted that if U.S. employment data underperforms or geopolitical risks spread to the Middle East or Central and South America, gold could once again challenge its historical highs. He added that even if the Federal Reserve is not eager to cut rates, the easing policy itself provides downward support for the gold market.

The U.S. December non-farm payroll data, scheduled for release on the 9th, is highly anticipated, as it will influence interest rate outlooks and safe-haven asset trends.