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Gold broke through the $4,400 an ounce level for the first time, hitting $4,417.53, as expectations of US interest rate cuts and strong demand for safe-haven assets fuelled a fresh rally.
Gold futures rose 1.3% to $4,442.70 an ounce, while spot gold climbed 1.6% to $4,412.23 at the time of writing.
Analysts attributed the move to growing expectations of further US rate cuts, alongside heightened geopolitical risk after US president Donald Trump and senior aides declined to rule out military conflict with Venezuela. The US has intensified its oil blockade against Venezuela, increasing pressure on the government of president Nicolás Maduro.
Tony Sycamore, market analyst at IG, said the gains were driven by “last week’s softer-than-expected US inflation and jobs reports, which reinforced expectations for two 25bp Fed rate cuts in 2026”.
He added that the rally was also supported by geopolitical tensions after Trump announced a “total and complete” blockade on sanctioned Venezuelan oil tankers and peace talks between Ukraine and Russia appeared to stall.
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Bullion has risen 67% so far this year, breaking multiple records and surpassing the $3,000 and $4,000 per-ounce thresholds for the first time. It is on track for its biggest annual gain since 1979.
Gold, which does not generate a yield, tends to benefit when interest rates are falling, as the opportunity cost of holding non-interest-bearing assets declines. Expectations of easing monetary policy have strengthened after US inflation slowed in November.
However, some analysts cautioned that the rally could be vulnerable to profit-taking. “Given that gold has already risen 4% this month and we’re nearing the end of the year, bulls may want to tread with caution as volumes are to deplete and odds of profit-taking are also likely on the rise,” said Matt Simpson, senior analyst at StoneX.
Oil prices edged higher on Monday after US officials said Washington had intercepted an oil tanker in international waters off the coast of Venezuela, heightening concerns about supply disruption.
Brent (BZ=F) crude futures gained 0.9% to $60.99 per barrel, while West Texas Intermediate (CL=F) rose by the same margin to $57.03.
“The market is waking up to the fact that the Trump administration is taking a hardline approach to the Venezuelan oil trade,” June Goh, senior oil market analyst at Sparta Commodities, told Reuters.
“Oil prices have thus been supported by this geopolitical news alongside the simmering Russian-Ukraine tensions in the background in an otherwise very bearish market fundamentally,” Goh added.
Read more: FTSE 100 LIVE: Stocks fall as UK economic growth slows
US Coast Guard officials said on Sunday they were tracking an oil tanker in international waters near Venezuela, according to multiple unnamed US officials cited by US media. The incident marked the second such action over the weekend and the third in the past week.
Officials described the episode as an “active pursuit” in the Caribbean Sea, which came a day after the coast guard seized another vessel off the Venezuelan coast, as Washington steps up pressure on the South American country’s crucial oil sector.
Unnamed officials told the Associated Press and Agence France-Presse that Sunday’s pursuit involved “a sanctioned dark fleet vessel that is part of Venezuela’s illegal sanctions evasion [network]”.
Sterling traded higher against its major peers after data pointed to modest resilience in the UK economy.
The pound was up 0.4% against the dollar, trading at $1.3420, and 0.1% higher versus the euro, trading at €1.1433.
The US dollar index (DX-Y.NYB), which tracks the greenback against a basket of six major currencies, was down 0.1% at 98.53.
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The gains followed the release of revised third-quarter UK gross domestic product data, which confirmed that the economy expanded by 0.1% quarter on quarter, in line with preliminary estimates, according to the Office for National Statistics.
However, analysts said the impact of the data on sterling was likely to be short-lived, with investors focused on signs of how the economy is performing in the final quarter of the year.
Last week, the Bank of England said in its monetary policy statement that staff expected “zero growth in Q4 GDP”, after the central bank cut interest rates by 25 basis points to 3.75% in a narrow 5–4 vote. Data released earlier this month showed the economy unexpectedly contracted by 0.1% in October.
In equities, the FTSE 100 (^FTSE) was lower on Monday morning, down 0.4% to 9,859 points. For more details on market movements, check our live coverage here.
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