Gold Pauses, Focus Shifts to NFP
Gold prices were nearly flat on Tuesday, following a sharp rally the previous day. The market began to shift its focus from Venezuelan headlines to this week's busy US economic data agenda. Meanwhile, silver continued to strengthen, recording a third consecutive session of gains.
Spot gold held around US$4,450 per ounce, after surging around 2.7% in the previous session following news of the arrest of Venezuelan President Nicolás Maduro. Uncertainty over the direction of the Caracas government remains a factor, especially after US President Donald Trump announced plans for Washington to participate in "managing" Venezuela, while Delcy Rodríguez was appointed interim president.
However, market participants are now starting to hold back and await new "triggers" from the US. The main focus is on a series of economic data, culminating in the Nonfarm Payrolls (NFP) report on Friday. Minneapolis Fed President Neel Kashkari has also signaled that interest rates are nearing neutral, making future data crucial for determining the next policy move.
In terms of sentiment, the safe-haven push from Venezuela is considered strong but likely to subside quickly if tensions don't escalate. This means gold still has support, but the room for additional short-term upside depends more on whether geopolitical risks escalate again or US data strengthens the case for an interest rate cut.
Fundamentally, gold remains in a strong major trend. Last year, the precious metal posted its best annual performance since 1979, supported by central bank buying, ETF inflows, and a series of Fed rate cuts—factors that make non-yielding assets like gold more attractive. Gold also reached a record high of US$4,549.92 on December 26, and some major banks still see potential for further gains throughout 2026.
However, there is a technical factor that the market is starting to monitor: potential pressure from commodity index rebalancing. The surge in gold and silver prices has the potential to force passive funds to adjust their portfolio weightings—which could trigger a countervailing sell-off starting Thursday, temporarily curbing the rally.
Silver, on the other hand, remains a more aggressive performer. Prices rose by around 3.6% on Tuesday. From China, LONGi Green Energy is reportedly considering replacing some base metals with silver in its solar cells—a signal that industrial demand remains strong despite soaring white metal prices and rising costs.
In European trading, gold edged up to around US$4,451.96 per ounce. Silver strengthened to US$77.90 per ounce. Platinum rose about 1%, and palladium remained relatively stable. Meanwhile, measures of US dollar strength edged higher, reflecting the market's continued anticipation of US data for further direction.
Source: Newsmaker.id
