The shock The US involvement in Venezuela rippled across markets on Monday, as Europe and the United States resumed trading for the first full week of January, with the crisis hitting stocks and commodities.
Gold and silver prices rose after the US apprehended Venezuelan President Nicolás Maduro over the weekend, while oil prices recovered from a prior drop. Stock indexes also rose, with shares of defense businesses outperforming.
Investors frequently reach for gold when the news reports are bleak or worrying as the metal has been known for acting as a store for value during uncertain times… traders are betting their bets by increasing investments in assets with supposed haven qualities, AJ Bell’s Russ Mould said.
Gold was trading at roughly $4,300 (€3,679) per troy ounce last Friday, but it jumped to more than $4,400 (€3,765) in European trading Monday. Another shelter asset, silver, traded at around $70 (€59.9) at market close on Friday, then hovered around $75 (€64) per ounce on Monday afternoon.
While geopolitical concerns frequently frighten investors, Mould believes a rapid, widespread sell-off is unlikely. Investors appear to believe that the events in Venezuela will not escalate into a full-blown conflict. This issue is very volatile, so investor opinion may shift quickly,” Mould explained.
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