The US dollar, US Treasury bonds, and gold all rose simultaneously in a rare move; the logic and risks behind gold's surge at the open.
2026-01-05 16:38:27
On Monday (January 5), spot gold rose 2% during the Asian and European sessions, currently trading around 4424. The main driver of this rise in gold prices is the US military action against Venezuela and the subsequent tough rhetoric.
Last week, spot gold successfully held the key support level of $4,300. After the US military arrested Venezuelan President Nicolás Maduro, market risk aversion intensified, and investors flocked to safe-haven assets such as gold, directly driving a surge in gold prices at the start of the new week.
Not only did the United States take military action, but it also released strong rhetoric, making it impossible for anyone to predict how things would develop. As the saying goes, things will turn around when they reach their extreme. Faced with huge uncertainty, the market released huge demand for safe-haven assets. As a result, the US dollar, US Treasury bonds, and gold have all received varying degrees of attention from funds, resulting in the rare situation where the US dollar, US Treasury bonds, and gold rose simultaneously.
According to The Guardian, US President Trump made a strong statement during Asian trading hours, saying that if Venezuelan interim president Delcy Rodriguez does not meet US demands, the US may launch another military intervention.
This marks the first direct military intervention by the United States in Latin America since its invasion of Panama in 1989. The Venezuelan vice president has assumed the role of interim leader and stated that Maduro remains the legitimate president.
On January 4, Colombian President Petro del Pedro took to social media to criticize the United States for taking action against Venezuela, calling it outrageous. He said that Trump's actions undermined the rule of law globally and seriously violated the sovereignty of Latin America and the Caribbean. He also called on the Venezuelan people to unite and defend their country.
Trump then turned his attention to Colombia and Mexico, stating that the current Colombian leader "doesn't have much time left in power" and that the "Colombian Action" plan sounded good, while also demanding that Mexico restore order to its internal affairs.
The anticipated spread of conflict risks in South America has further amplified safe-haven buying in the market, with both the US dollar and gold, the two major safe-haven assets, attracting capital inflows.
It is worth noting that the strengthening of the US dollar has also limited the upside potential of gold to some extent, especially with the upcoming release of the US December non-farm payroll report this week, leading to more cautious market sentiment.
Besides geopolitical factors, the Federal Reserve's policy moves also provided underlying support for gold prices. The latest minutes of the Federal Open Market Committee (FOMC) meeting show that most Fed officials believe that further interest rate cuts are justified as long as inflation continues to decline, with disagreements only on the timing and magnitude of such cuts.
For gold, which does not generate interest, a rate cut means a decrease in holding costs, which is undoubtedly a substantial benefit.
From a market perspective, the US government has also signaled that it will use oil resources as leverage to promote political change in Venezuela. This will undoubtedly exacerbate the instability in Latin America and inject more momentum into the rise of gold prices.
Venezuelan interim president Delcy Rodriguez established a special committee on Sunday to push for the release of Maduro and his wife, and the developments in this case will continue to affect market sentiment.
For gold traders, the key focus this week, besides the evolving geopolitical situation, will also be the US non-farm payroll data to be released on Friday.
The market currently expects non-farm payrolls to increase by 57,000. If the data is strong, it will likely boost the US dollar index, thereby putting some pressure on gold prices denominated in US dollars. Conversely, if the data falls short of expectations, gold bulls may take the opportunity to push for a move towards the $4,400 mark.
From a daily chart technical perspective, spot gold is clearly trending upwards in the short term. Supported by both safe-haven demand and policy expectations, there is still room for further gains. However, traders should be wary of the risk of a pullback due to easing geopolitical tensions or disappointing non-farm payroll data, and should manage their positions carefully.
The simultaneous rise in the US dollar, US Treasury bonds, and gold indicates that the market is releasing its safe-haven demand. At the same time, the market is rapidly pricing in the worst-case scenario, namely that information from the US and Venezuelan governments will continue to influence the market, affecting the prices of investment products by influencing market expectations of risk assessment.
Because markets are prone to overpricing risks, the market may quickly turn around as the event continues to unfold.
Therefore, if the US dollar turns downward this time and US Treasury yields rise, it indicates a recovery in risk sentiment, which may not be a positive signal for gold.
As mentioned in previous articles, copper and silver are likely to reach new highs under the AI wave. Copper has basically recovered its previous losses today. Therefore, the overall risk appetite and market sentiment in the AI industry remain important factors that we need to consider when trading gold.
From a technical perspective, the key level for spot gold is 4434.56. Currently, the highest price of gold has reached 4430, and this level needs close monitoring. At the same time, the price of gold continues to move along the upward channel. If the price of gold can stabilize above 4430, there is a chance for it to continue to rise.
(Spot gold daily chart, source: FX678)
At 16:34 Beijing time, spot gold was trading at $4424.96 per ounce.
Last week, spot gold successfully held the key support level of $4,300. After the US military arrested Venezuelan President Nicolás Maduro, market risk aversion intensified, and investors flocked to safe-haven assets such as gold, directly driving a surge in gold prices at the start of the new week.
Not only did the United States take military action, but it also released strong rhetoric, making it impossible for anyone to predict how things would develop. As the saying goes, things will turn around when they reach their extreme. Faced with huge uncertainty, the market released huge demand for safe-haven assets. As a result, the US dollar, US Treasury bonds, and gold have all received varying degrees of attention from funds, resulting in the rare situation where the US dollar, US Treasury bonds, and gold rose simultaneously.
Trump's tough rhetoric fuels conflict risk and exacerbates market concerns.
According to The Guardian, US President Trump made a strong statement during Asian trading hours, saying that if Venezuelan interim president Delcy Rodriguez does not meet US demands, the US may launch another military intervention.
This marks the first direct military intervention by the United States in Latin America since its invasion of Panama in 1989. The Venezuelan vice president has assumed the role of interim leader and stated that Maduro remains the legitimate president.
On January 4, Colombian President Petro del Pedro took to social media to criticize the United States for taking action against Venezuela, calling it outrageous. He said that Trump's actions undermined the rule of law globally and seriously violated the sovereignty of Latin America and the Caribbean. He also called on the Venezuelan people to unite and defend their country.
Trump then turned his attention to Colombia and Mexico, stating that the current Colombian leader "doesn't have much time left in power" and that the "Colombian Action" plan sounded good, while also demanding that Mexico restore order to its internal affairs.
The anticipated spread of conflict risks in South America has further amplified safe-haven buying in the market, with both the US dollar and gold, the two major safe-haven assets, attracting capital inflows.
It is worth noting that the strengthening of the US dollar has also limited the upside potential of gold to some extent, especially with the upcoming release of the US December non-farm payroll report this week, leading to more cautious market sentiment.
The Fed's dovish expectations underpin interest rate cuts, which are beneficial for non-US precious metals.
Besides geopolitical factors, the Federal Reserve's policy moves also provided underlying support for gold prices. The latest minutes of the Federal Open Market Committee (FOMC) meeting show that most Fed officials believe that further interest rate cuts are justified as long as inflation continues to decline, with disagreements only on the timing and magnitude of such cuts.
For gold, which does not generate interest, a rate cut means a decrease in holding costs, which is undoubtedly a substantial benefit.
From a market perspective, the US government has also signaled that it will use oil resources as leverage to promote political change in Venezuela. This will undoubtedly exacerbate the instability in Latin America and inject more momentum into the rise of gold prices.
Venezuelan interim president Delcy Rodriguez established a special committee on Sunday to push for the release of Maduro and his wife, and the developments in this case will continue to affect market sentiment.
Non-farm payroll data becomes a key variable; traders need to be wary of the risk of a shift between bullish and bearish trends.
For gold traders, the key focus this week, besides the evolving geopolitical situation, will also be the US non-farm payroll data to be released on Friday.
The market currently expects non-farm payrolls to increase by 57,000. If the data is strong, it will likely boost the US dollar index, thereby putting some pressure on gold prices denominated in US dollars. Conversely, if the data falls short of expectations, gold bulls may take the opportunity to push for a move towards the $4,400 mark.
From a daily chart technical perspective, spot gold is clearly trending upwards in the short term. Supported by both safe-haven demand and policy expectations, there is still room for further gains. However, traders should be wary of the risk of a pullback due to easing geopolitical tensions or disappointing non-farm payroll data, and should manage their positions carefully.
Summary and Technical Analysis:
The simultaneous rise in the US dollar, US Treasury bonds, and gold indicates that the market is releasing its safe-haven demand. At the same time, the market is rapidly pricing in the worst-case scenario, namely that information from the US and Venezuelan governments will continue to influence the market, affecting the prices of investment products by influencing market expectations of risk assessment.
Because markets are prone to overpricing risks, the market may quickly turn around as the event continues to unfold.
Therefore, if the US dollar turns downward this time and US Treasury yields rise, it indicates a recovery in risk sentiment, which may not be a positive signal for gold.
As mentioned in previous articles, copper and silver are likely to reach new highs under the AI wave. Copper has basically recovered its previous losses today. Therefore, the overall risk appetite and market sentiment in the AI industry remain important factors that we need to consider when trading gold.
From a technical perspective, the key level for spot gold is 4434.56. Currently, the highest price of gold has reached 4430, and this level needs close monitoring. At the same time, the price of gold continues to move along the upward channel. If the price of gold can stabilize above 4430, there is a chance for it to continue to rise.
(Spot gold daily chart, source: FX678)
At 16:34 Beijing time, spot gold was trading at $4424.96 per ounce.
- Risk Warning and Disclaimer
- 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.
