Last week, as traders returned to their desks after the holidays, the financial market opened with a sense of tension due to the situation in Venezuela, raising concerns about potential disruptions and their effects on the Latin/South American economy and oil prices.
However, market participants approached the situation with caution and maintained a level of calm as stability reigned.
As market sentiment improved, Brent oil prices increased by USD 2, given that Venezuela accounts for roughly 1 percent of global oil production and its output is considered heavy and sour.
Some estimates indicate that the cost to boost Venezuelan oil production may be around USD 80, while Brent oil is currently trading near USD 63.30.
Nonetheless, geopolitical factors will remain significant for financial markets, with investors particularly focused on Mexico and Colombia, as well as Greenland, which is part of Denmark and has ties to NATO and the US. Additionally, Iran is expected to be a prominent focus.
In the meantime, the US non-farm payroll (NFP) data released on Friday indicated weaknesses in the job market, with only 50,000 jobs added compared to an expectation of 60,000. Interestingly, the unemployment rate dropped to 4.4 percent from 4.6 percent, suggesting that while the labour market may be cooling, it still remains tight, especially regarding wage growth, which could hinder any interest rate cut in January. The Federal Open Market Committee (FOMC) is set to meet on January 26.
This presents a complex situation for Federal Reserve policymakers as they consider whether to cut rates or wait for further clues. Overall, it may have lessened the pressure on the Fed as it weighs its next steps this month.
Another important development this week is the US court’s decision regarding tariffs. On January 9, no ruling was made, and the next court opinion is expected on Wednesday, January 14.
However, this will depend on whether the court chooses to hear the case. The court could determine whether to overturn the tariff ruling, with a potential refund amounting to roughly $ 150 billion, posing a significant challenge to executive authority.
As the Greenland/Denmark situation continues to be worrisome, the tariff remains a pressing issue for Eurozone economies. One thing is certain:
Trump is unlikely to eliminate it completely. He may lower it below 30 percent, or a reciprocal deal might be a possibility.
PRECIOUS METAL
Meanwhile, precious metals continued to be driven by safe-haven demand last week following the capture of Venezuelan President Maduro. However, there was some correction and profit-taking mid-week. Throughout the week, the fluctuations in gold and silver led to price changes in both metals. However, after the jobs data was released on Friday, gold prices spiked, finishing above USD 4500.
Gold appreciated by about 4 percent, while silver, despite two margin hikes in late December 2025, failed to deter speculators who kept purchasing at lower price points.
There are two main factors fueling market demand for gold and silver. In uncertain times, as global currencies and bonds face pressures due to economic conditions, gold is sought after as a safe-haven asset.
Meanwhile, the demand for silver has surged due to concerns over a potential shortage of physical supply. It is said that production cannot be ramped up immediately, and industries cannot easily replace their operations with alternatives, making the purchase of physical silver increasingly appealing.
Geopolitical tensions remain high, and gold is likely to stay in demand as investors seek to capitalize on price dips. In this unpredictable climate, which is characterised by a generally unstable financial landscape, I anticipate that central banks will increase their gold purchases instead of investing in USD or US assets.
However, it’s important to remember that many investors may still prefer to put their money into US assets. The constraints on supply are likely to push metal prices upward.
Looking ahead to next week, the release of US CPI data on Tuesday will serve as a key indicator, alongside New Home Sales figures. On Wednesday, we can expect to see the US PPI, Retail Sales, and Existing Home Sales data. Then, on Thursday, weekly jobless claims and the Empire State and Philly Fed Manufacturing Surveys will be published.
Traders should remain alert this week, as volatility is expected to persist in the market.
WEEKLY OUTLOOK — JAN 12-16
GOLD @ USD 4510— Although gold has the ability to make early gains, it must surpass USD 4568 to reach the range of USD 4585-90. While, if it falls below the support level of USD 4448, the risk of further losses toward USD 4390 will increase.
EURO @ 1.1638— Euro appears to be facing challenges and may find it hard to surpass 1.1745 in order to achieve 1.1790. Nevertheless, the support level at 1.1540 is expected to maintain some recovery. If that doesn’t hold, 1.1510 may come into play.
GBP @ 1.3403— Pound Sterling is expected to find support at 1.3340, which should allow for a rebound. A move past 1.3510 would pave the way for 1.3575. If not, it could drop to 1.3295.
JPY @ 157.89— The $/Yen pair needs to remain above 156.30 to maintain its upward movement towards the 158.80-90 or 159.30 levels. A breach of the support level could lead to a decline to 155.90.
Copyright Business Recorder, 2026
The writer is former Country Treasurer of Chase Manhattan Bank. The views expressed in this article are not necessarily those of the newspaper
He tweets @asadcmka