Gold Price Forecast: Geopolitical Tensions Drive Safe-Haven Demand

Published: January 5, 2026

Author: James Hyerczyk

Overview

Gold prices have surged due to escalating geopolitical tensions, particularly following the U.S. arrest of Venezuelan President Nicolas Maduro and comments made by former President Trump regarding potential military actions against Colombia and Mexico. This has led to increased safe-haven buying, pushing spot gold (XAUUSD) to its highest level in over a week.

Current Market Conditions

As of 14:39 GMT, gold is trading at $4425.53, reflecting a rise of $93.47 or +2.16%. The market is currently testing a critical Fibonacci retracement zone between $4405 and $4436, which will be pivotal in determining the future direction of gold prices.

Geopolitical Influences

Trump's recent statements have heightened concerns about military interventions in Latin America, particularly if these countries do not curb the flow of illicit drugs into the U.S. Additionally, his remarks about Greenland have prompted Denmark to enter a "crisis mode," indicating the seriousness of the geopolitical climate.

Technical Analysis

Despite the recent rally, the gold market is still in a retracement phase following a significant sell-off. The main trend remains upward, with a record high of $4536.74 serving as a key resistance level. A break above this level would signal a resumption of the uptrend, while a drop below $4274.02 could indicate a shift to a downward trend.

Key Levels to Watch

• Resistance: $4436.38 (Fibonacci level)
• Support: $4274.02 (swing bottom)
• Record High: $4536.74

A sustained move above $4436.38 could lead to further buying momentum, while failure to hold above $4405.38 may result in increased selling pressure.

Conclusion

The current geopolitical landscape is significantly influencing gold prices, with safe-haven demand driving recent gains. Traders should closely monitor the key Fibonacci levels and geopolitical developments to navigate the market effectively.