Gold Price Forecast: XAU/USD on fire at the start of the week on US-Venezuela tensions
- Gold regains upside traction early Monday as flight to safety prevails on Venezuela turmoil.
- The US Dollar finds strong haven demand, caps Gold’s upside as focus shifts to US jobs data.
- Gold’s daily technical setup suggests that more upside remains in the offing.
Gold is holding over 1.5% gains early Monday in a solid start to the first full trading week of 2026, looking to find a strong foothold above the $4,400 threshold.
Gold capitalizes on escalating geopolitical risks
Having defended the $4,300 level in the previous week, Gold kicks off a new week with a bang, as investors remain risk-averse, digesting the United States’ (US) military aggression in Venezuela and the capture of the former President Nicolas Maduro.
A flight to safety remains the key underlying theme this Monday, reviving Gold’s stellar performance seen in 2025. Markets remain worried as US President Donald Trump threatened earlier in the Asian session that Washington might make a fresh military intervention if Venezuela’s interim president, Delcy Rodríguez, did not accommodate their demands, the Guardian reported.
Trump further noted that “Colombia is governed by a sick man he will not be doing it very long. Operation Colombia sounds good to me. We have to do something with Mexico; Mexico has to get their act together.”
Growing risks that the South American conflict could extend into other countries such as Mexico and Colombia also prompt investors to run for cover in safe havens like the US Dollar (USD), Gold etc.
These unprecedented geopolitical tensions, combined with uncertainty ahead of key US labor data this week, keep Gold shining alongside other precious metals such as Silver and Platinum.
Looking ahead, markets will keep their eyes glued on any further military intervention by the US in Latin America, especially with Venezuela in the eye of the storm.
Venezuela’s interim President Delcy Rodriguez on Sunday created a commission to seek the release of President Nicolas Maduro and his wife Cilia Flores, who were removed from power by US forces in Caracas.
Gold price technical analysis: Daily chart
In the daily chart, the Simple Moving Averages (SMA) are bullishly aligned, with the 21-day above the 50-, 100-, and 200-day, and all slopes rising. Price holds above these averages, keeping the near-term bias positive, with the 21-day SMA at $4,334.85 offering nearby dynamic support. The RSI (14) at 60.29 remains above its midline, signaling firm buying momentum.
The upward configuration suggests the path of least resistance remains to the upside. Initial pullbacks could be cushioned by the 50-day SMA at $4,190.62, while a deeper correction would expose the 100-day SMA at $3,973.91. If the RSI advances toward 70, upside could slow as overbought conditions emerge; a retreat toward 50 would temper momentum.
(The technical analysis of this story was written with the help of an AI tool)
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
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Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
