Gold prices rose in European trading on Tuesday, extending their gains for a third consecutive day and hitting a one-week high, supported by strong demand for the metal as a safe haven amid rising geopolitical risks following the complex US strike in Venezuela and the arrest of President Nicolas Maduro.
The advance was also underpinned by a pullback in the US dollar after the release of bleak data on US factory activity, alongside a series of dovish comments from some Federal Reserve officials.
Price overview
• Gold prices today: Gold rose by 0.6% to $4,475.79, the highest level in a week, from an opening level of $4,448.91, after touching a session low at $4,427.98.
• At settlement on Monday, the precious metal posted a gain of 2.7%, marking its second consecutive daily increase, following the US strike in Venezuela and supported by the decline in the US dollar.
The Venezuelan crisis
On Monday, detained Venezuelan president Nicolas Maduro pleaded not guilty to charges of conspiracy to traffic drugs, terrorism, and possession of automatic weapons before a federal court in New York.
Meanwhile, officials in Caracas sought to reorganize their ranks, with Vice President Delcy Rodríguez assuming the role of interim president. She stressed that Maduro remains the country’s constitutional president and pledged to resist US intervention.
International reactions ranged from Israeli support to condemnation from Russia and China, while US experts warned that the move could make the world “far more dangerous” and potentially spark a broader conflict in Latin America.
US dollar
The US dollar index fell by around 0.2% on Tuesday, extending its losses for a second straight session and moving further away from a four-week high at 98.86 points, reflecting continued weakness in the US currency against a basket of global currencies.
Beyond profit-taking pressure, the dollar retreated after gloomy US data showed a deeper contraction in the manufacturing sector in December, offering fresh evidence of slowing economic activity during the fourth quarter of last year.
These weak readings kept expectations of monetary easing by the Federal Reserve intact and confirmed that geopolitical risks alone are not sufficient to sustain further gains in the US dollar.
US interest rates
• Minneapolis Federal Reserve President Neel Kashkari, a voting member of the central bank’s rate-setting committee this year, said he sees a risk of a sharp rise in the unemployment rate.
• According to CME’s FedWatch tool, pricing for the probability of keeping US interest rates unchanged at the January 2026 meeting currently stands at 84%, while the probability of a 25-basis-point rate cut remains at 16%.
• Investors are currently pricing in two US rate cuts over the course of next year, while Federal Reserve projections point to only one additional cut of 25 basis points.
• To reassess these expectations, investors are closely monitoring the release of further US economic data, in addition to comments from Federal Reserve officials.
Gold outlook
Market strategist Ilya Spivak said that comments from Federal Reserve officials were certainly not harmful, but noted that the overall calculations have not changed significantly, adding that this week is critical with the release of the US jobs report on Friday.
Spivak added that Maduro’s arrest highlighted the rift between the United States and China and, more broadly, the ongoing trend toward de-globalization.
SPDR fund
Gold holdings at the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, were unchanged on Monday, leaving total holdings at 1,065.13 metric tons, the lowest level since December 22.
