Spot Gold Surges As US Captures Venezuela Prez Nicolas Maduro; Will Safe-Haven Rush Lift Gold Rate In India?

The ongoing geopolitical tensions following the United States' air strikes in Venezuela and the subsequent capture of its President, Nicolas Maduro, are expected to impact gold and silver prices in India and global markets. US President Donald Trump, on Saturday, January 3, said that the US is going to "run" Venezuela "until such time," and affirmed that it "can ensure a safe, proper and judicious transition."

Venezuela's key allies, Russia, Cuba and Iran, have strongly condemned the US strikes on the Latin American nation, calling the move a violation of its sovereignty. The sharp escalation in geopolitical tensions has once again put gold prices in the spotlight. With the standoff expected to intensify in the coming days, here's a look at how rising US-Venezuela tensions could shape the trajectory of gold prices in India.

Gold Rate in India

The price of 24 karat gold in India declined nearly Rs 38 per gram to Rs 13,582 per gram on Saturday, January 3. Whereas, the rate of 22 karat gold in India fell by Rs 35 per gram to Rs 12,450 per gram. Similarly, the rate of 18 karat gold in India slid by Rs 28 per gram to Rs 10,187 per gram.

Spot Gold Rate

According to investing.com, the last spot gold rate recorded was $ 4,330.5 per ounce, recorded with a surge of 0.36%. Meanwhile, the international gold prices stood at $4,360 per ounce on Friday, January 2, as per Trading Economics.

Can US-Venezuela Tensions Fuel Gold Prices in India?

The ongoing geopolitical tension is likely to impact the safe-haven demand for precious metal, gold, and even silver. Hence, there could be some price volatility in gold rate in India as well as the metal's international prices on Monday, January 5.

While, there has some price correction in gold over the past few days, but the ongoing geopolitical tensions, accompanied by other factors like inflation, currency weakness, etc will keep the gold anchored in the USD 4,500-5,000 range, according to Rajeev Sharan, Head - Criteria, Model Development & Research, Brickwork Ratings.

"The underlying drivers-inflation, currency weakness, and geopolitical uncertainty-remain strong enough to overcome any correction, keeping gold prices anchored in the USD 4,500-5,000 range," stated Rajeev Sharan earlier.

In the short-term, there can be a strong momentum in the gold prices, base metals, crude oils, and even energy commodities due to the US attack on Venezuela, according to Anuj Gupta, Director at Ya Wealth.

"US attack on Venezuela is expected to trigger geopolitical tension in the region, which is expected to fuel the uncertainty. Hence, I am expecting a gap-up opening for gold, silver, copper, crude oil, gasoline, etc," Anuj Gupta told Mint.

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