Economy

Gold gains as geopolitical risks and Fed rate-cut bets boost demand

Maduro pleaded not guilty on Monday when he appeared in a New York court on charges of narco-terrorism and ​possession of machine guns and destructive devices.

Gold prices edged higher on Tuesday to around a one-week high, supported by safe-haven ⁠demand amid rising geopolitical tensions over the U.S. capture of Venezuelan President Nicolas Maduro and growing expectations ⁠of U.S. ‌rate cuts. Spot gold was up 0.1% at $4,452.60 per ounce, as of 0946 GMT, after rising nearly 3% in the last session. Bullion hit a record high ⁠of $4,549.71 on December 26, and ended the year with a gain of 64%, its best annual performance since 1979. U.S. gold futures for February delivery rose 0.3% to $4,462.60.

“Gold prices are supported by increased safe-haven demand amid heightened geopolitical uncertainty following weekend events ⁠in Venezuela, as well as ​by rising bets on Federal Reserve rate cuts after the release of disappointing U.S. manufacturing PMI data,” said ActivTrades ‍analyst Ricardo Evangelista.

Maduro pleaded not guilty on Monday when he appeared in a New York court on charges of narco-terrorism and ​possession of machine guns and destructive devices. Meanwhile, U.S. manufacturing activity contracted more than expected in December and fell to a 14-month low. Minneapolis Fed President Neel Kashkari on Monday warned of the risk that the jobless rate could “pop” higher, increasing the likelihood of a rate cut.

Investors are currently expecting two rate cuts this year, and are looking out for December’s nonfarm payrolls report, due on Friday, to gauge the trajectory of future monetary policy.

Non-yielding assets tend to do well in a low-interest-rate environment and during times of geopolitical or economic uncertainty. Spot silver ⁠gained 1.9% to $77.97 per ounce, its highest level in a ‌week, after hitting an all-time high of $83.62 on December 29. Silver recorded its strongest annual gain in 2025, surging 147%, on rising industrial and investor appetite. Spot platinum was up ‌1.4% at $2,303.90 ⁠per ounce, after rising to an all-time high of $2,478.50 last Monday, while palladium traded 0.2% higher at $1,710.25 ⁠per ounce. 

© ZAWYA 

GLOBAL BUSINESS AND FINANCE MAGAZINE

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