Quick overview

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Gold remained stable near a record high as investors monitored the escalating tensions in Venezuela and awaited US inflation data.

Bullion was trading close to $4,330 per ounce  after increasing by 0.8 percent on Wednesday, . It is about $50 away from its October all-time high. The Federal Reserve’s appetite for additional interest rate cuts will be closely monitored in the inflation data that is due on Thursday.

Precious metals, which don’t pay interest, benefited greatly from the Fed’s third consecutive rate cut last week. However, the Fed has been unclear about the rate of monetary easing going into next year. There is about a 25% chance of a reduction in January, according to traders. Additionally, rising inflation reduces bond returns, which benefits gold.

Precious metals have become more appealing due to heightened tensions, and this week’s events in Venezuela—where Trump has ordered a blockade of all sanctioned oil tankers—have helped them. Brazil and Mexico have offered to mediate as pressure mounts on Nicolás Maduro’s government due to an increased US military presence in the area.

According to Dilin Wu, a research strategist at Pepperstone Group Ltd., “the direction of real yields has become more supportive.”. Precious metals are reclaiming their function as portfolio stabilizers when combined with persistent geopolitical unpredictability and reduced year-end liquidity. Gold has risen to almost second place.