Gold approached a new record high as investors awaited US inflation data and monitored escalating tensions in Venezuela, while silver jumped to a new historic peak, continuing a strong upward trend.
The precious metal traded near $4,330 an ounce, recovering from a slight dip in the previous session that ended a five-day winning streak. Gold is about $50 below its all-time high.
Markets are awaiting inflation data due on Thursday for clues as to how the Federal Reserve's appetite for further interest rate cuts has been affected. Several top Fed officials are scheduled to make public remarks before the data release.
Venezuela adds support for gold
Gold received additional support from developments in Venezuela after US President Donald Trump ordered a blockade on all oil tankers subject to sanctions. The US president is escalating pressure on his Venezuelan counterpart, Nicolás Maduro, amid a military buildup in the region and threats of ground strikes.
Gold is not far from its record high above $4,381 an ounce, reached in October. The precious metal has jumped by about two-thirds this year and is on track for its best annual performance since 1979.
This sharp rise was driven by increased central bank purchases, coupled with a broader sell-off of government debt and major currencies by investors. Geopolitical tensions also bolstered gold's appeal as a safe haven.
Interest rate bets and the path of monetary policy
Investors are closely watching for any signs of further monetary easing after the Federal Reserve implemented its third consecutive interest rate cut last week, a factor that has supported non-yielding precious metals. Currently, traders are pricing in a near 25% probability of a rate cut in January.
Tuesday's non-farm payrolls data showed the U.S. labor market continued to slow, but it did not alter expectations of an interest rate cut. The Federal Reserve is seen as placing less weight than usual on economic data due to the ongoing disruptions caused by the U.S. government shutdown.
Appointment of a new Federal Reserve chairman under scrutiny
The appointment of a new Federal Reserve chairman is expected to provide further clues about the direction of monetary policy next year.
The Wall Street Journal, citing unnamed sources, reported that Trump, who has called for sharp interest rate cuts, will interview Federal Reserve Governor Chris Waller on Wednesday for the position.
One or two more interviews are likely to take place this week, with a decision to be announced sometime in early January, according to Treasury Secretary Scott Bessent.
Price forecasts and metal performance
The average price of gold is expected to reach $4,500 an ounce in 2026, according to Nikki Shiles, head of research at precious metals refiner MKS Pump, joining a wave of forecasts predicting continued growth.
In a note on Tuesday, Shiels wrote that gold may experience a near-term consolidation phase before establishing a more moderate and sustainable upward trajectory, following its meteoric rise this year.
Gold rose 0.7% to $4,322.45 an ounce at 1:16 p.m. Singapore time. Silver climbed as much as 4% to $66.274 an ounce, hitting a new record high. Platinum also rose as much as 3% to its highest level since 2011, while palladium gained as well. The Bloomberg Dollar Spot Index rose 0.2%.
