Gold prices have held steady at around $4,440 since the week’s opening, as much of the market has seen demand for safe haven assets amid the Venezuela-US crisis.
Market players will also be closely watching key US economic data throughout the week, with key events such as the Non-Farm Payrolls (NFP) report due for more clues on monetary policy.
At 9 a.m., gold was at $4,437, down 0.25% since the early Asian open on Tuesday.
Tensions between the US and Venezuela have risen to new highs following the US Army’s Delta Force raid on Venezuela and the arrest of its President, Nicolás Maduro, and his wife on Saturday.
On Monday, Maduro pleaded not guilty to US charges in a narco-terrorism case against him, kicking off an unprecedented legal battle with major geopolitical implications, according to Bloomberg.
Rising geopolitical tensions and uncertainty in the region are driving inflows into traditional safe-haven assets such as gold.
Meanwhile, dovish expectations for the US Federal Reserve (Fed) are also contributing to the rise in the yellow metal.
The minutes of the recent Federal Open Market Committee (FOMC) meeting showed that most Fed officials see further rate cuts as appropriate as long as inflation continues to decline over time, although they remain divided on the timing and extent of the cuts.
Lower interest rates could potentially reduce the cost of holding gold, thus supporting the non-yielding precious metal.
All eyes are now on the US jobs report for December due out on Friday.
The US economy is expected to add 55,000 jobs in the month, while the Unemployment Rate is projected to fall to 4.5% over the same period.
If the report shows stronger-than-expected results, it could support the strengthening US Dollar (USD) and put pressure on the prices of USD-denominated commodities in the near term.
