Gold prices surged on Monday as escalating geopolitical tensions boosted demand for safe-haven assets, pushing the precious metal sharply higher after weeks of strong gains driven by monetary policy expectations and central bank buying.
Spot gold rose 2.1 percent from last week’s close to trade at around US$4,421 an ounce by 0720 GMT, up roughly US$90 from Friday, according to market data. The rally came amid growing global unease following a US military operation in Venezuela that led to the capture of the country’s leader, Nicolas Maduro, and his transfer to the United States to face criminal charges.
The dramatic escalation in US-Venezuela tensions injected fresh uncertainty into global markets, prompting investors to shift funds into assets traditionally seen as stores of value during periods of political and financial stress.
Market analysts said the latest gains underscore gold’s dual role as both a hedge against geopolitical risk and a beneficiary of expectations that major central banks, led by the US Federal Reserve, may move toward a more accommodative policy stance later this year.
“Tensions in Latin America have added another layer of risk to an already fragile global outlook,” said one precious metals analyst in London. “In that environment, gold remains a natural refuge.”
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The surge followed reports that US President Donald Trump had issued renewed warnings to several countries following the Venezuela operation, heightening fears of broader diplomatic or military fallout. While financial markets initially reacted cautiously, demand for safe assets strengthened as details of the operation emerged.
Gold has been on a strong upward trajectory in recent months, repeatedly setting record highs. Last month, the metal reached an all-time peak of US$4,525.96 per ounce, supported by a combination of geopolitical uncertainty, persistent inflation concerns and aggressive purchases by central banks, particularly in emerging markets.
Central bank demand has become a key structural driver of gold prices, with several countries seeking to diversify reserves away from the US dollar amid shifting geopolitical alliances and concerns over financial sanctions. Analysts say this trend has provided a solid floor under prices even during periods of reduced market volatility.
At the same time, expectations that the Federal Reserve may eventually pivot toward interest rate cuts have also supported bullion. Lower interest rates tend to reduce the opportunity cost of holding non-yielding assets such as gold, making them more attractive to investors.
However, recent US economic data has been mixed, leading to uncertainty over the timing and scale of any policy easing. Despite this, geopolitical developments have increasingly taken centre stage in driving price movements.
Silver also benefited from the flight to safety and broader strength in precious metals markets. The metal climbed 3.94 percent on Monday to trade at about $75.50 an ounce, extending gains that have been supported by both investment demand and expectations of industrial use, particularly in renewable energy technologies.
Other precious metals, including platinum and palladium, also edged higher, though gains were more modest compared with gold and silver.
While some analysts cautioned that prices could face short-term corrections after the recent rally, many said the broader outlook for gold remains bullish as long as geopolitical risks persist and central banks continue to accumulate reserves.
“The market is pricing in a world with higher political risk and less certainty,” said a commodities strategist. “That environment tends to favour gold.”
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Looking ahead, investors will closely monitor developments in Venezuela and any diplomatic responses from regional and global powers. Attention will also remain focused on upcoming signals from the Federal Reserve and other major central banks, as well as inflation data that could influence policy expectations.
For now, the sharp rise in gold prices highlights how quickly geopolitical shocks can ripple through global markets, reinforcing the metal’s status as a barometer of uncertainty in times of international tension.
