(Kitco News) - Gold and silver prices are sharply higher in early U.S. trading Monday, on safe-haven bidding following the surprise U.S. raid in Venezuela that captured its dictator. February gold was last up $97.70 at $4,427.40. March silver prices were up $3.66 at $75.65.
Markets assessing implications of U.S. raid that captured Venezuela’s dictator, but no panic. U.S. stock indexes and the U.S. dollar also rose after the surprise weekend U.S. ouster of Venezuela’s President Nicolas Maduro fanned geopolitical risk but not panic. Risk-sensitive assets remained in demand, with technology stocks driving gains in global equities. Equity traders are showing little concern that tensions will curtail a three-year bull run in global stocks,” said a Bloomberg report. Europe’s STOXX 50 rose more than 1% and the STOXX 600 gained 0.5% at the start of the first full week of the new year, extending the record highs reached on Friday. The buoyant mood in stocks was most prevalent in Asia, where a regional gauge hit an all-time high. Spot gold advanced more than 2% to climb above $4,430 an ounce, while silver jumped 4%. Nymex crude oil futures were near steady and trading around $57.25 a barrel overnight, while Brent crude fell toward $60 a barrel, in a sign that oil traders were taking the developments in Venezuela in stride. “On a day that saw demand for havens and riskier assets, the greenback and gold offered safety as questions swirled about what the weekend’s events hold for the global order. In bond markets, the yield on 10-year U.S. Treasury note fell two basis points to 4.17%. “The question is whether the events will add to the appeal of U.S. debt by stoking risk or diminish demand due to concerns over inflation or U.S. fiscal policy,” said Bloomberg. “The economic impact of what happened in Venezuela is too small to weigh on equity markets,” said Christopher Dembik, senior investment adviser at Pictet Asset Management and as reported by Bloomberg. “That’s also true when it comes to oil: People have had the time to take a look at the data and in the most optimistic scenario, it will take two or three years to have a significant impact.” “There is still uncertainty about what comes next. Venezuela’s acting president Delcy Rodríguez asked the U.S. to work with her country, striking a more conciliatory tone toward the Trump administration after her initial outrage at the capture of Maduro,” said Bloomberg.
Big U.S. economic data week ahead. Traders and investors are also focused on key U.S. economic data this week that could influence Federal Reserve policy. Markets are awaiting the monthly jobs report for December on Friday, along with jobs and labor turnover survey (JOLTS) and ADP employment figures, ISM purchasing managers indexes (PMIs), and the Michigan consumer confidence survey.
Fed official: More U.S. rate cuts possible this year. Federal Reserve Bank of Philadelphia President Anna Paulson said modest additional U.S. interest-rate cuts could be appropriate later in 2026 if the economy has a benign outlook. “Paulson noted that risks to the labor market remained elevated, but claims for unemployment insurance appear to have stabilized, and she said the labor market is ‘clearly bending, it is not breaking.’ Paulson estimated that current Fed monetary policy remained ‘a little restrictive,’ which will help to bring inflation to the Fed's 2% target, and she expects goods inflation to moderate in the second half of 2026,” she said and as reported by Bloomberg.
More U.S.-Europe-Ukraine talks on Russia-Ukraine peace plan. U.S. negotiators will join European leaders in Paris on Tuesday in the latest effort to hash out postwar security guarantees for Ukraine, President Volodymyr Zelenskiy said and as reported by Bloomberg. “The focus will be on security guarantees for Ukraine, and recovery. There will be also meetings with the team of President Trump,” Zelenskiy said, adding that the talks could last a day or two. Ukraine hopes to set up a meeting in the U.S. at the leaders’ level by the end of January, he added. The White House hasn’t commented on U.S. participation in the upcoming Paris talks or on next steps to end Russia’s almost four-year invasion of its neighbor, Bloomberg said.
OPEC-plus to keep its crude oil production levels unchanged. OPEC-plus members on Sunday stuck with the cartel’s plans to pause crude oil supply increases in the first quarter, as global markets face a surplus and the group awaits clarity on whether the U.S. capture of Venezuela leader Nicolas Maduro will impact global oil supplies. Key members led by Saudi Arabia and Russia agreed on Sunday to keep production levels steady through the end of March, once again ratifying a decision first made in November to suspend last year’s sequence of swift increases. “Delegates said they didn’t discuss Venezuela during the 10-minute video conference, and that it’s premature to gauge how to respond to the unfolding situation,” Bloomberg reported.
The key outside markets today see the U.S. dollar index slightly firmer. Crude oil prices are slightly up and trading around $57.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.17%.
Technically, February gold futures bulls’ next upside price objective is to produce a close above solid resistance at the contract/record high of $4,584.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $4,200.00. First resistance is seen at the overnight high of $4,451.70 and then at $4,500.00. First support is seen at the $4,400.00 and then at the overnight low of $4,354.60. Wyckoff's Market Rating: 7.5.
March silver futures bulls’ next upside price objective is closing prices above solid technical resistance at the record high of $82.67. The next downside price objective for the bears is closing prices below solid support at last week’s low of $69.225. First resistance is seen at the overnight high of $76.05 and then at $77.00. Next support is seen at the overnight low of $72.505 and then at $71.00. Wyckoff's Market Rating: 7.5.
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