Gold Trading Alert: Could the US Declare War on Venezuela? Gold Prices Approach Record Highs; Watch Trump's Speech and CPI Data
2025-12-18 07:46:03
In the global financial markets at the end of 2025, gold prices surged like a runaway horse, driven by a combination of factors including weak US employment data, renewed expectations of a Federal Reserve rate cut, and escalating geopolitical tensions. On Wednesday (December 17), spot gold prices continued to climb, reaching a high of $4348.70 per ounce before closing near $4338 per ounce, a gain of nearly 1%. Meanwhile, silver prices broke through the $66 mark, reaching a record high of $66.88 per ounce, while platinum also hit a more than 17-year high. On Thursday (December 18) in early Asian trading, spot gold traded in a narrow range, currently around $4340 per ounce. The focus for the day is on Trump's national address and the delayed release of the US November CPI data.
Following the release of the US November jobs data, market sentiment quickly turned optimistic. Although the number of new jobs reached 64,000, exceeding expectations, the unemployment rate unexpectedly rose to 4.6%, the highest level since September 2021. This data revealed potential signs of weakness in the labor market, which investors widely interpreted as a signal that the Federal Reserve might accelerate interest rate cuts. Gold, as a non-interest-bearing asset, tends to perform well in low-interest-rate environments because interest rate cuts reduce the opportunity cost of holding gold, thereby attracting more capital inflows.
Specifically, while Tuesday's jobs report showed strong job growth, the rising unemployment rate raised concerns about the economy's resilience. Federal Reserve Governor Christopher Waller stated clearly at a recent event that the Fed still has room for further interest rate cuts given weakening job growth and declining inflation risks. This contrasts with the conservative view of Atlanta Fed President Bostic, who believes economic growth will rebound to around 2.5% and price pressures will remain high, thus suggesting that borrowing costs may not be lowered further in 2026. This internal division within the Fed has further amplified market expectations for rate cuts, pushing gold prices close to the near eight-week high of $4353.36 reached last Friday, hitting a high of $4348.70 per ounce during the session.
Meanwhile, the November Consumer Price Index (CPI) and Personal Consumption Expenditures (PCE) price index, to be released later this week, will be key indicators. If these inflation figures are lower than expected, it will further reinforce the path of interest rate cuts, and gold prices are expected to break through recent resistance levels, even potentially challenging the $4,400 mark. Historically, gold has often become a preferred safe haven for funds whenever cracks appear in the job market, and this time is no exception.
Beyond the impact of economic data, the deteriorating international geopolitical situation also provided strong support for gold. US President Trump on Tuesday ordered a blockade of all sanctioned oil tankers entering and leaving Venezuela, the latest move by Washington to pressure the Maduro government and further escalate tensions between the US and Venezuela. Even more alarming, according to US journalist Tucker Carlson, citing members of Congress, Trump may declare war on Venezuela and plans to formally announce it in a national address at 9 p.m. Eastern Time on December 17 (10:00 a.m. Beijing Time on Thursday). This potential military action quickly ignited risk aversion in the market, driving investors to safe-haven assets such as gold.
As a major oil-producing nation, Venezuela's turbulent situation could not only disrupt global energy supplies but also trigger broader geopolitical repercussions. Historically, similar crises in the Middle East or Latin America have often led to a short-term surge in gold prices. This current event, coupled with Trump's hardline stance, has allowed gold's safe-haven appeal to be fully realized. Meanwhile, the decline in the US stock market has indirectly supported gold prices. The Dow Jones Industrial Average fell 0.47% to 47,885.97 points, the S&P 500 fell 1.16% to 6,721.43 points, and the Nasdaq Composite fell 1.81% to 22,693.32 points, mainly dragged down by concerns about artificial intelligence funding, with tech stocks such as Oracle plunging 5.4% and Nvidia falling 3.8%. A weak stock market often prompts funds to shift from risk assets to gold, further solidifying its upward momentum.
Against this backdrop, silver's performance has been particularly strong, with spot silver rising nearly 4% to $66.22 per ounce, hitting a record high of $66.87 during the session. Analysts point out that silver is leading the gold rally, with some funds rotating from gold to silver, platinum, and palladium, and silver's short-term target may be $70 per ounce. This reflects the overall strength of the precious metals market, with silver's year-to-date gain reaching 129%, far exceeding gold's 65%.
Internal dynamics within the Federal Reserve and the succession of its chairman have become important variables influencing gold prices. Current Chairman Jerome Powell's term will end in May 2026, and Trump has begun interviewing potential successors, with Christopher Waller being a leading candidate. Before his interview with Trump, Waller vowed to "absolutely" defend the Fed's independence, despite Trump's continued calls for interest rate cuts and statements in the interview that the next chairman should consult him on monetary policy. This potential risk of political interference has raised market concerns that the Fed's policy independence may be compromised, increasing uncertainty about economic policy and thus benefiting gold.
Waller emphasized that the routine meetings between the Federal Reserve Chairman and the Treasury Secretary are sufficient as a communication channel, noting that Trump has clearly expressed his monetary policy preferences on social media. Meanwhile, other candidates such as White House economic advisor Hassett and former Federal Reserve Governor Walsh have also emerged, but Hassett's close relationship with Trump has raised questions about his independence. A Yale University survey showed that while business leaders strongly support Waller, only about a third believe Trump will choose him. This succession battle could delay the Federal Reserve's policy decisions, especially given the current uncertain economic outlook.
Furthermore, the stable yields in the US bond market also reflect a wait-and-see attitude in the market. The two-year Treasury yield rose 0.8 basis points to 3.487%, while the 10-year Treasury yield remained essentially unchanged at 4.149%. Due to the 43-day federal government shutdown causing data delays and reducing the credibility of economic indicators, the Federal Reserve is unlikely to cut interest rates anytime soon; federal funds rate futures indicate only a 24% probability of a rate cut in January. The dollar index rose 0.18% to 98.40, also putting some pressure on gold bulls, but overall, the Fed's dovish stance remains dominant.
The dollar's movements are also closely linked to global central bank policies. Despite Wednesday's rise, the dollar has fallen about 9.5% so far this year, its biggest annual drop since 2017. This weakness has provided support for gold, as it is priced in dollars, and a weaker dollar tends to push up gold prices. The market is awaiting decisions from several central banks this week, including the Bank of England and the European Central Bank on Thursday, and the Bank of Japan on Friday, which is expected to raise interest rates to their highest level in 30 years. These policy changes could further impact the dollar's exchange rate; if other central banks shift towards tightening while the Federal Reserve maintains its accommodative stance, the dollar could continue to be under pressure, which would be beneficial for gold.
In summary, the future trend of the gold market depends on the evolution of multiple factors. If CPI and PCE data confirm a cooling of inflation, expectations for interest rate cuts will further intensify; if the situation in Venezuela escalates into conflict, safe-haven demand will explode. However, downside risks from a rebounding dollar and internal divisions within the Federal Reserve should be noted. In the short term, gold is expected to test resistance levels at $4350 and $4380 respectively. In the medium to long term, economic uncertainty in 2026 may drive gold prices to higher levels.
In short, this round of gold price increases is not merely a short-term reaction to economic data and geopolitical events, but a reflection of escalating global uncertainty. Investors should closely monitor upcoming data releases and Trump's national address, and rationally seize opportunities. In the precious metals market, silver's strength may foreshadow more rotational price movements, while gold, as a core safe-haven asset, will continue to shine.
(Spot gold daily chart, source: FX678)
At 07:44 Beijing time, spot gold was trading at $4338.92 per ounce.
Weak employment data fuels expectations of interest rate cuts
Following the release of the US November jobs data, market sentiment quickly turned optimistic. Although the number of new jobs reached 64,000, exceeding expectations, the unemployment rate unexpectedly rose to 4.6%, the highest level since September 2021. This data revealed potential signs of weakness in the labor market, which investors widely interpreted as a signal that the Federal Reserve might accelerate interest rate cuts. Gold, as a non-interest-bearing asset, tends to perform well in low-interest-rate environments because interest rate cuts reduce the opportunity cost of holding gold, thereby attracting more capital inflows.
Specifically, while Tuesday's jobs report showed strong job growth, the rising unemployment rate raised concerns about the economy's resilience. Federal Reserve Governor Christopher Waller stated clearly at a recent event that the Fed still has room for further interest rate cuts given weakening job growth and declining inflation risks. This contrasts with the conservative view of Atlanta Fed President Bostic, who believes economic growth will rebound to around 2.5% and price pressures will remain high, thus suggesting that borrowing costs may not be lowered further in 2026. This internal division within the Fed has further amplified market expectations for rate cuts, pushing gold prices close to the near eight-week high of $4353.36 reached last Friday, hitting a high of $4348.70 per ounce during the session.
Meanwhile, the November Consumer Price Index (CPI) and Personal Consumption Expenditures (PCE) price index, to be released later this week, will be key indicators. If these inflation figures are lower than expected, it will further reinforce the path of interest rate cuts, and gold prices are expected to break through recent resistance levels, even potentially challenging the $4,400 mark. Historically, gold has often become a preferred safe haven for funds whenever cracks appear in the job market, and this time is no exception.
Escalating geopolitical tensions amplify demand for safe-haven assets
Beyond the impact of economic data, the deteriorating international geopolitical situation also provided strong support for gold. US President Trump on Tuesday ordered a blockade of all sanctioned oil tankers entering and leaving Venezuela, the latest move by Washington to pressure the Maduro government and further escalate tensions between the US and Venezuela. Even more alarming, according to US journalist Tucker Carlson, citing members of Congress, Trump may declare war on Venezuela and plans to formally announce it in a national address at 9 p.m. Eastern Time on December 17 (10:00 a.m. Beijing Time on Thursday). This potential military action quickly ignited risk aversion in the market, driving investors to safe-haven assets such as gold.
As a major oil-producing nation, Venezuela's turbulent situation could not only disrupt global energy supplies but also trigger broader geopolitical repercussions. Historically, similar crises in the Middle East or Latin America have often led to a short-term surge in gold prices. This current event, coupled with Trump's hardline stance, has allowed gold's safe-haven appeal to be fully realized. Meanwhile, the decline in the US stock market has indirectly supported gold prices. The Dow Jones Industrial Average fell 0.47% to 47,885.97 points, the S&P 500 fell 1.16% to 6,721.43 points, and the Nasdaq Composite fell 1.81% to 22,693.32 points, mainly dragged down by concerns about artificial intelligence funding, with tech stocks such as Oracle plunging 5.4% and Nvidia falling 3.8%. A weak stock market often prompts funds to shift from risk assets to gold, further solidifying its upward momentum.
Against this backdrop, silver's performance has been particularly strong, with spot silver rising nearly 4% to $66.22 per ounce, hitting a record high of $66.87 during the session. Analysts point out that silver is leading the gold rally, with some funds rotating from gold to silver, platinum, and palladium, and silver's short-term target may be $70 per ounce. This reflects the overall strength of the precious metals market, with silver's year-to-date gain reaching 129%, far exceeding gold's 65%.
The debate over the Fed's independence and the change of chairman adds uncertainty.
Internal dynamics within the Federal Reserve and the succession of its chairman have become important variables influencing gold prices. Current Chairman Jerome Powell's term will end in May 2026, and Trump has begun interviewing potential successors, with Christopher Waller being a leading candidate. Before his interview with Trump, Waller vowed to "absolutely" defend the Fed's independence, despite Trump's continued calls for interest rate cuts and statements in the interview that the next chairman should consult him on monetary policy. This potential risk of political interference has raised market concerns that the Fed's policy independence may be compromised, increasing uncertainty about economic policy and thus benefiting gold.
Waller emphasized that the routine meetings between the Federal Reserve Chairman and the Treasury Secretary are sufficient as a communication channel, noting that Trump has clearly expressed his monetary policy preferences on social media. Meanwhile, other candidates such as White House economic advisor Hassett and former Federal Reserve Governor Walsh have also emerged, but Hassett's close relationship with Trump has raised questions about his independence. A Yale University survey showed that while business leaders strongly support Waller, only about a third believe Trump will choose him. This succession battle could delay the Federal Reserve's policy decisions, especially given the current uncertain economic outlook.
Furthermore, the stable yields in the US bond market also reflect a wait-and-see attitude in the market. The two-year Treasury yield rose 0.8 basis points to 3.487%, while the 10-year Treasury yield remained essentially unchanged at 4.149%. Due to the 43-day federal government shutdown causing data delays and reducing the credibility of economic indicators, the Federal Reserve is unlikely to cut interest rates anytime soon; federal funds rate futures indicate only a 24% probability of a rate cut in January. The dollar index rose 0.18% to 98.40, also putting some pressure on gold bulls, but overall, the Fed's dovish stance remains dominant.
The interplay of the US dollar and global central bank policies impacts the outlook for gold.
The dollar's movements are also closely linked to global central bank policies. Despite Wednesday's rise, the dollar has fallen about 9.5% so far this year, its biggest annual drop since 2017. This weakness has provided support for gold, as it is priced in dollars, and a weaker dollar tends to push up gold prices. The market is awaiting decisions from several central banks this week, including the Bank of England and the European Central Bank on Thursday, and the Bank of Japan on Friday, which is expected to raise interest rates to their highest level in 30 years. These policy changes could further impact the dollar's exchange rate; if other central banks shift towards tightening while the Federal Reserve maintains its accommodative stance, the dollar could continue to be under pressure, which would be beneficial for gold.
In summary, the future trend of the gold market depends on the evolution of multiple factors. If CPI and PCE data confirm a cooling of inflation, expectations for interest rate cuts will further intensify; if the situation in Venezuela escalates into conflict, safe-haven demand will explode. However, downside risks from a rebounding dollar and internal divisions within the Federal Reserve should be noted. In the short term, gold is expected to test resistance levels at $4350 and $4380 respectively. In the medium to long term, economic uncertainty in 2026 may drive gold prices to higher levels.
In short, this round of gold price increases is not merely a short-term reaction to economic data and geopolitical events, but a reflection of escalating global uncertainty. Investors should closely monitor upcoming data releases and Trump's national address, and rationally seize opportunities. In the precious metals market, silver's strength may foreshadow more rotational price movements, while gold, as a core safe-haven asset, will continue to shine.
(Spot gold daily chart, source: FX678)
At 07:44 Beijing time, spot gold was trading at $4338.92 per ounce.
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- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
