Gold and Silver Prices Rise as Demand for Safe Havens Returns

SadaNews - Gold and silver prices have risen as investors turn to safe-haven assets in precious metals, amid escalating geopolitical risks following the U.S. arrest of Venezuelan President Nicolas Maduro.

Gold advanced in spot transactions by up to 2.1% in early Monday trading, surpassing $4,420 per ounce. Silver rose by approximately 4.8%.

U.S. President Donald Trump stated that the United States plans to "manage" Venezuela following Maduro's overthrow, leaving uncertainty about the future of governance in the South American nation. U.S. Secretary of State Marco Rubio mentioned that Washington would use its influence over oil to enforce further change.

Nicky Shields, head of research at precious metals refining company MKS Pamp, wrote in a note that "markets now have to reprice not only the risks of Venezuela but also the unpredictability of American policy and military influence."

Record Performance for Gold and Silver

Gold achieved its best annual performance since 1979 last year, recording a series of record levels, supported by central bank purchases, eased Federal Reserve policies, and a weakened U.S. dollar.

Demand for safe-haven assets, driven by geopolitical tensions and trade frictions, supported prices, despite noticeable volatility in late December as some investors took profits and trading indicators signaled overbought conditions. Gold lost 4.4% last week, which was its largest weekly decline since November 2024.

Ahmad Asiri, an analyst at Pepperstone Group, stated that tensions in Venezuela "add a limited aspect to geopolitical risks outside trade-related issues," adding that he expects an increase in urgency among Latin American investors to diversify their investments into gold. He noted that "Maduro's situation in custody sets an unwelcome precedent."

Among major banks, there is also support for the likelihood of gold gaining further during this year, particularly with expectations that the Federal Reserve will implement more interest rate cuts and as President Trump reshapes the leadership of the U.S. central bank.

Goldman Sachs indicated last month that its base scenario involves prices rising to $4,900 per ounce, with additional upside risks.

Gold receives additional support from the long-term risks facing the U.S. economy due to rising federal debt, according to a panel of senior economists who spoke on Sunday.

Former Federal Reserve Chair and former U.S. Treasury Secretary Janet Yellen stated that the prerequisites for what is known as "financial dominance" are strengthening, a scenario where the size of the debt compels the central bank to keep interest rates low to reduce debt servicing costs.

Silver's Rise Outpaces Gold

Silver saw a larger increase than gold last year, surpassing levels that, until recently, seemed unimaginable even to the most optimistic market observers.

In addition to the factors supporting gold, silver has also benefited from ongoing fears that the U.S. administration may eventually impose tariffs on imports of refined metal.

Gold rose by 1.6% to $4,400.01 per ounce by 9:20 AM Singapore time. Silver climbed 4.3% to $75.92. Prices for platinum and palladium gained about 2%. The Bloomberg Dollar Spot Index increased by 0.1%.