Gold prices sprinted to a more than one-week high on Monday, edging closer to their record peak, as geopolitical turmoil stirred up by the U.S. capture of Venezuelan President Nicolas Maduro sparked a flight to safety.
Spot gold climbed 2.3% to $4,430.27 an ounce by 1123 GMT for its highest since December 29. The metal had hit a record high of $4,549.71 on December 26.
U.S. gold futures for February delivery gained 2.6% to $4,443 an ounce.
“Gold is benefiting from the U.S.-Venezuela escalation over the weekend. This has increased demand for the safe-haven precious metal as it adds to uncertainties market participants are already grappling with,” said Zain Vawda, analyst at MarketPulse by OANDA.
U.S. President Donald Trump told reporters on Sunday that he could order another strike if Venezuela does not cooperate with U.S. efforts to open up its oil industry and stop drug trafficking. He also suggested that Colombia and Mexico could face military action if they do not reduce the flow of illicit drugs.
“The Trump administration’s immediate comments about Mexico in the aftermath of the Venezuela operation leave market participants with questions regarding future operations in Latin America, which should keep the demand for gold elevated in the near term,” Vawda added.
The precious metal climbed by about 64% last year, driven to the biggest annual gain since 1979 by Federal Reserve rate cuts, geopolitical tensions, strong central bank buying and rising holdings at exchange-traded funds.
Markets will be hoping for further clues on central bank monetary policy this year from December’s non-farm payrolls on Friday. Investors currently expect at least two cuts to U.S. interest rates this year.
In other precious metals, spot silver jumped 3.9% to $75.42 an ounce after hitting a record $83.62 on December 29.
Silver soared by 147% last year, driven by its designation as a U.S. critical mineral, persistent supply deficits and growing investor and industrial demand.
Spot platinum gained 3.1% to $2,208.62 an ounce, having touched a record high of $2,478.50 a week earlier, while palladium rose 2.3% to $1,676.12.
