Gold prices approach $4,335 per ounce

SadaNews - Gold is nearing a new record level as investors await U.S. inflation data and monitor escalating tensions in Venezuela, while silver has surged to a new historic peak, continuing a strong upward trend.

The precious metal traded near $4,335 per ounce, recovering from a slight decline in the previous session that ended a five-day streak of gains. Gold is about $50 shy of its all-time highs.

Markets are looking forward to inflation data set to be released on Thursday, searching for signals about how the Federal Reserve's appetite for further interest rate cuts may be affected. Ahead of the data, several senior Fed officials are scheduled to make public statements.

Venezuela adds support for gold

Gold received additional support from developments in Venezuela after U.S. President Donald Trump ordered a blockade on all sanctions-affected oil tankers. The U.S. president is ramping up pressure on Venezuelan President Nicolas Maduro amid military build-up in the region and threats of conducting ground strikes.

Gold is not far from its record high above $4,381 per ounce, recorded in October. The precious metal has surged by about two-thirds this year, heading for its best annual performance since 1979.

This sharp increase has been driven by rising purchases from central banks, along with a broader retreat from investors from government debt and major currencies. Geopolitical tensions have also enhanced gold's appeal as a safe-haven asset.

Interest rate bets and monetary policy path

Investors are closely watching for any signals regarding further monetary easing, after the Federal Reserve executed its third consecutive interest rate cut last week, a factor that supports non-yielding precious metals. Currently, traders are pricing in about a 25% chance of a rate cut in January.

Data released on Tuesday regarding non-farm payrolls indicated a continued slowdown in the U.S. labor market, but did not alter expectations for interest rate cuts. The Fed is seen as giving less weight than usual to economic data due to ongoing disruptions caused by the U.S. government shutdown.

Appointment of a new Fed chair under scrutiny

The appointment of a new chair for the Federal Reserve is expected to provide additional signals regarding the monetary policy path for the next year.

The Wall Street Journal reported, citing unnamed sources, that Trump, who has called for sharp interest rate cuts, will interview Federal Reserve Board member Christopher Waller on Wednesday for the position.

One or two more interviews are likely to take place this week, with an announcement expected sometime in early January, according to Treasury Secretary Scott Piesent.

Price forecasts and metal performance

Average gold prices are expected to reach $4,500 per ounce in 2026, according to Nikki Shields, head of research at precious metals refining company MKS Pamp, joining a wave of forecasts predicting continued increases.

Shields wrote in a note on Tuesday that gold could experience a consolidation phase in the near term "before establishing a more moderate and sustainable upward trajectory" following this year’s "rocket-like" surge.

Gold rose by 0.7% to $4,322.45 per ounce at 1:16 PM Singapore time. Silver surged by up to 4% to reach $66.274 per ounce, recording a new all-time high. Platinum increased by up to 3% to its highest level since 2011, while palladium also rose. The Bloomberg Dollar Spot Index increased by 0.2%.