By Keerthi Ramesh
The global markets moved cautiously Monday as escalating political turmoil in Venezuela pushed investors toward safe haven assets, lifting gold prices while the U.S. dollar remained firm against major currencies.
The uncertainty follows a U.S. military operation that resulted in the capture of Venezuelan President Nicholas Maduro, sharply raising geopolitical risk in Latin America. While markets have so far avoided sharp turbulence, the event has added a note of caution to trading at the start of the year.
The U.S. dollar has now strengthened against the euro, Japanese yen and Swiss franc, supported by its traditional role as a refuge during periods of global uncertainty. Currency traders appeared to balance geopolitical concerns with expectations around U.S. economic data and the Federal Reserve’s policy outlook. Strong U.S. labor market indicators and resilient growth expectations have continued to underpin the dollar’s strength.
Gold prices, meanwhile, surged as investors sought protection from geopolitical risk. Spot gold rose sharply in early trading, climbing more than one percent to hover near recent highs. The rally reflects renewed demand for safe haven assets as markets assess the broader implications of the Venezuela situations.
Gold typically moves contrarily to the dollar, as stronger U.S. currency makes the metal more expensive for the buyers using other currencies. However, analysts say the current environment reflects a risk of sentiment in which investors are simultaneously seeking safety in both assets.
READ: Opinion: Why Venezuela matters (January 4, 2026)
A senior commodities analyst at a global brokerage firm said, “The move into gold suggests investors are hedging against uncertainty rather than making directional bets on currencies.”
The Venezuelan crisis adds to an already complex global backdrop for precious metals. Gold prices have been supported in recent months by expectations of potential U.S. interest rate cuts later in 2026, along with continued buying by the central banks and concerns about geopolitical flashpoints worldwide.
Market participants remain cautious as they wait for further clarity on how the situation in Venezuela may evolve. Analyst note that any prolonged instability or policy shifts could influence commodity markets more broadly, particularly if sanctions or supply chains are affected.
For now, the reaction underscores how geopolitical shocks can reinforce existing market trends. The dollar continues to benefit from its safe haven status and strong economic fundamentals, while gold is drawing renewed interest as investors seek insurance against this uncertainty.
As global markets move forward into the new year, the attention is said to remain on the geopolitical developments and the upcoming economic data, all of which will shape the overall investors sentiment in the weeks ahead.