Gold Price Forecast: XAU/USD jumps above $4,350 on US-Venezuela tensions
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Gold price rises to near $4,370 in Monday’s early Asian session.
Geopolitical tensions and Fed rate cut bets boost the Gold price.
The US ISM Manufacturing PMI report is due later on Monday, ahead of the highly anticipated NFP data.
Gold price (XAU/USD) climbs to around $4,370 during the early Asian trading hours on Monday. The precious metal extends its upside amid a renewed surge in geopolitical risk after the United States' (US) capture of Venezuelan President Nicolas Maduro. Traders will closely monitor developments surrounding the US seizure of Maduro and await the US ISM Manufacturing Purchasing Managers' Index (PMI) data later on Monday.
CNN reported over the weekend that the US President Donald Trump administration called a “large-scale strike against Venezuela” and captured its President Maduro to face charges. This action came without the approval of Congress. Trump added that the US will be running Venezuela until it can do a safe, proper, and judicious transition.
On Sunday, US Secretary of State Marco Rubio said the US will use leverage over oil to force further change in Venezuela. The US attack on Venezuela is expected to trigger geopolitical tensions in the region and fuel the uncertainty. This, in turn, could boost traditional safe-haven assets such as Gold.
The recent Federal Open Market Committee (FOMC) Minutes showed that most US Federal Reserve (Fed) officials saw further interest-rate reductions as appropriate so long as inflation declines over time, though they remained divided over when and how far to cut. Lower interest rates could reduce the opportunity cost of holding Gold, supporting the non-yielding precious metal.
The release of the US December employment report will be in the spotlight later on Friday. The market consensus forecast for Nonfarm Payrolls (NFP) is for a gain of 57,000 jobs. In case of a stronger-than-expected outcome, this could strengthen the US Dollar (USD) and weigh on the USD-denominated commodity price in the near term.
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