• Gold ↑ 2% on mounting geopolitical tensions
• US invades Venezuela and captures it’s president
• Ongoing Ukraine talks and US data could add to gold volatility
• Gold forecasted to move ↑ 0.8% or ↓ 1.2% post NFP
• Technical levels – $4400, $4500 and ATH at $4550

Markets head into the first full trading week of the year with a bang.

Over the weekend, the US carried out large-scale strikes against Venezuela, capturing its president and flying him out of the country.

President Nicolás Maduro will stand trial on criminal charges in the United States.

This heightened geopolitical risk could spark a wave of risk aversion, prompting investors to seek safe-haven destinations.

In the equity space the reaction has been muted so far, but oil prices could see volatility considering how Trump stated that the US plans to take over Venezuela’s oil.

One of the biggest movers so far has been gold, which gapped higher from Friday’s close as investors reacted to the weekend turmoil.

Prices are currently up over 2%.

Interestingly, gold fell as much as 6% last week, dipping below $4300 before staging this strong rebound.

A wave of profit-taking triggered the selloff after hitting fresh all-time highs ($4549.92) and a stabilizing dollar.

WHAT COULD MOVE XAUUSD THIS WEEK?

Geopolitics and key US data may shape the outlook for the precious metal.

Beyond the developments in Venezuela, the ongoing Ukraine peace talks will be in focus.

According to Ukrainian President Volodymyr Zelensky, the peace agreement to end the war with Russia is “90% ready”.

However, recent drone strikes in Russia have rekindled tensions between the two nations despite diplomats expressing optimism over peace talks.

On the data front, it’s all about the US NFP report on Friday.

Friday 9th January

US December NFP report – (13:30 PM GMT)

XAUUSD is forecasted to move 0.8% up or 1.2% down in a 6-hour window after the US initial jobless claims.

Note: Traders are pricing in a 51% probability that the Fed cuts rates by March 2026.

POTENTIAL SCENARIOS:

BULLISH – A solid daily close above $4400 may trigger an incline toward $4500 and $4541.79 the upper bound of Bloomberg FX model.

BEARISH – Weakness below $4400 could see prices decline toward $4320 and $4269.41 the lower bound of Bloomberg’s FX model.