Gold prices benefit from geopolitical developments

Limited Impact on Risk Appetite

Gold prices have risen by more than 2.5% since the start of the weekly trading session, driven by recent political developments. U.S. forces escorted the Venezuelan president to appear before a federal court in New York. However, global risk appetite has not been materially affected, given Venezuela’s limited role in the global economy. On the contrary, some investors view these developments as a potential opportunity for a return of U.S. investments to oil-rich Venezuela, which could prompt the United States to lift economic sanctions. It is worth noting that Venezuela’s current president, who succeeded the ousted leader, has expressed a willingness to cooperate with the United States, paving the way for the removal of U.S. sanctions and an improvement in the Venezuelan economy.

Further Rate Cuts in 2026

Despite cumulative U.S. interest rate cuts totaling 150 basis points, Federal Reserve officials acknowledge that current rates have not yet reached the targeted neutral level (estimated at around 3.25%) which neither restrains nor stimulates economic growth. This has led markets to anticipate at least two additional rate cuts of 25 basis points during the current year. Given the Federal Reserve’s dual mandate of price stability and maximum employment, market discussions are now focused on the pace and number of future cuts. This comes amid November data showing unemployment at its highest level in several years (4.6%), while U.S. inflation in the same month stood at 2.7%, still above the Fed’s 2% target, particularly after the effects of tariffs imposed by the new Trump administration last year began to materialize. Accordingly, it is likely that members of the Federal Open Market Committee will pause rate cuts at the January meeting and wait for additional data before deciding whether to cut or hold rates at the March meeting.

Gold prices – Technical Analysis

On December 31, gold prices tested the support level along the ascending trendline originating from the October 28 low and rebounded, confirming the resilience of the current uptrend. At present, prices may be heading toward a test of the high end of the current trading zone located between 4,250 and 4,500. A daily close above the high end of the zone would signal a continuation of the bullish move, opening the door to a retest of the December 28 high at 4,549. A breakout above this level could then pave the way toward the 4,700 mark. Under this scenario, close attention should be paid to the psychological resistance level at 4,600.

Key levels in the alternative scenario

A break below the ascending trendline, followed by a daily close under 2,250, would signal the end of the prevailing uptrend and a shift toward a corrective phase. In such a case, gold prices could retreat toward the 4,000 level per ounce, and a break below this level could extend losses toward 3,900. Under this scenario, the 50-day moving average should be closely monitored as a key support level.

Gold – Daily Price Chart

Chart Source: ADSS Platform