Quick overview
- Gold and silver prices rose as investors reacted to increased geopolitical risks following the US capture of Venezuelan leader Nicolás Maduro.
- Silver surged nearly 5 percent, while spot gold climbed up to 2.1 percent, exceeding $4,420 per ounce.
- President Trump announced intentions for the US to ‘run’ Venezuela, raising concerns about the country’s governance and access to its oil reserves.
- Leading banks predict further gains for gold this year, with Goldman Sachs projecting a potential increase to $4,900 per ounce.
Gold and silver increased with investors assessing increased geopolitical risks in the wake of the US capture of Venezuelan leader Nicolás Maduro. Silver increased by almost 5 percent on Monday, while spot gold increased by up to 2.1 percent, surpassing $4,420 per ounce.
President Donald Trump stated that the US intends to “run” Venezuela following Maduro’s overthrow over the weekend, raising questions about the country’s future governance. Washington, he claimed, needed “total access” to the nation, including its oil reserves.
With the help of central bank purchases and inflows to bullion-backed exchange-traded funds, gold hit several records last year, marking its best annual performance since 1979. Precious metals, which don’t pay interest, benefited greatly from the US Federal Reserve’s three consecutive rate cuts.
Leading banks are strongly in favor of additional gold gains this year, particularly in light of the Fed’s anticipated further interest rate cuts and Trump’s reshaping of the US central bank’s leadership. Last month, Goldman Sachs Group stated that an increase to $4,900 per ounce was its base case, with upside risks.
According to a panel of prominent economists speaking on Sunday, the US economy is confronting long-term risks due to growing federal debt. Former Fed chair and Treasury Secretary Janet Yellen stated that the prerequisites for fiscal dominance—in which the amount of debt forces the central bank to act—are getting stronger.
Olumide Adesina
Financial Market Writer
Olumide Adesina is a French-born Nigerian financial writer. He tracks the financial markets with over 15 years of working experience in investment trading.
