Gold prices climbed on Tuesday, extending gains for a third consecutive session, as investors sought refuge in the precious metal following the United States military operation in Venezuela that resulted in the capture of President Nicolas Maduro.
Spot gold rose to 4,464.41 dollars per ounce, up 0.41 percent on the day. The precious metal has gained 6.55 percent over the past month and is nearly 70 percent higher than a year ago, based on contracts for difference tracking the benchmark market.
The rally followed a sharp jump on Monday when bullion surged 2.7 percent after Washington carried out a military operation that captured Maduro and his wife Cilia Flores from their home in Caracas early Saturday morning. President Donald Trump said the United States would temporarily run Venezuela and warned of potential second strikes if the interim government fails to meet American demands.
The developments heightened geopolitical uncertainty and prompted investors to increase allocations to gold, widely regarded as a safe haven asset during periods of political and economic stress. The surprise military action, codenamed Operation Absolute Resolve, involved more than 150 American aircraft and resulted in significant damage to Venezuelan military installations.
Market participants remain focused on upcoming United States labor market data, particularly the December jobs report due Friday, which could shape expectations for the Federal Reserve’s (Fed) next policy steps and influence gold prices in coming weeks.
On Monday, Minneapolis Federal Reserve President Neel Kashkari warned that inflation remains too high and noted the risk that unemployment could rise suddenly. However, he added that United States interest rates may be approaching a neutral level, suggesting the central bank is close to completing its rate adjustment cycle.
Kashkari told CNBC that the labor market is clearly cooling while inflation persists above comfortable levels. The unemployment rate has drifted to 4.6 percent while the Fed’s preferred core inflation measure stands at 2.8 percent, though data accuracy has been questioned due to impacts from an extended government shutdown.
The Fed official indicated that monetary policy may be close to neutral now, meaning interest rates neither stimulate nor restrain economic growth. He expressed concern about inflation persistence, particularly as potential tariff effects could take multiple years to work through the economic system.
Analysts highlight that a combination of geopolitical risk and uncertainty over United States monetary policy continues supporting gold prices, even as markets remain sensitive to incoming economic data. The precious metal ended 2025 with its strongest annual gain since 1979, underpinned by strong haven demand, central bank purchases, and exchange traded fund inflows.
The Venezuela situation has not yet significantly impacted oil markets, with crude prices showing only modest gains despite Venezuela’s status as a major oil producer. Kashkari noted that any economic effects would likely come through oil price channels, similar to the commodity shockwave that followed Russia’s invasion of Ukraine, though such impacts have not materialized thus far.
Gold’s recent strength reflects broader concerns about global stability and economic conditions. The metal gained about 65 percent in 2025, fueled by geopolitical tensions, expectations of lower United States borrowing costs, persistent uncertainty, sustained central bank buying worldwide, and renewed inflows into gold backed exchange traded funds.
Market observers suggest gold could continue climbing toward 4,800 dollars per ounce based on technical patterns, though near term consolidation appears likely after the rapid gains. Central banks around the world continue accumulating gold reserves, while elevated debt levels across major economies provide additional support for precious metals.
The precious metals complex has experienced exceptional strength recently, with silver prices increasing more than 100 percent year over year. However, analysts caution that silver’s volatility exceeds gold’s, making the yellow metal a more stable safe haven choice for conservative investors during uncertain times.
Friday’s employment report will be closely watched for signs of labor market deterioration that could prompt the Federal Reserve to resume interest rate cuts. Any weakness in job creation or uptick in unemployment could provide further support for gold prices by increasing expectations for easier monetary policy ahead.
The Fed implemented three consecutive rate cuts totaling 0.75 percentage points in late 2025, bringing the federal funds rate to a range of 3.50 to 3.75 percent. Chair Jerome Powell said after December’s cut that monetary policy now sits within a broad range of neutral, though opinions differ among policymakers about the appropriate path forward.
President Trump has criticized the Federal Reserve for cutting rates too slowly and has taken steps to reshape the institution, including appointing rate cut advocates to key positions. The president faces broader questions about monetary policy independence as his leadership term progresses.
The Venezuela operation represents the biggest United States intervention in Latin America since the 1989 invasion of Panama. Maduro and Flores were transported to New York where they face federal charges related to drug trafficking and narcoterrorism. The operation has drawn international criticism, with United Nations officials and several American allies expressing concerns about the precedent and potential violations of Venezuelan sovereignty.
Venezuelan Vice President Delcy Rodriguez, serving as acting leader, denounced the capture as kidnapping and demanded confirmation that both individuals remain alive. Cuban and Venezuelan officials reported more than 80 people killed in the operation, including 32 Cuban military and intelligence personnel who were in Venezuela at the time of the strike.
The geopolitical fallout from the Venezuela operation continues developing, with potential implications for regional stability, oil markets, and broader international relations. Trump has hinted at possible military action against other Latin American leaders, adding uncertainty to an already tense situation that supports continued safe haven demand for gold and other traditional stores of value.
