Gold prices hit a record high in early Asian trade on Tuesday, extending recent gains as safe-haven demand was buoyed by heightened geopolitical tensions between the U.S. and Venezuela.

Thin trading volumes, on account of the year-end holidays, magnified moves across gold and other precious metals. Gold and silver prices hit record highs on Monday, while platinum and palladium hit multi-year peaks.

Spot gold last traded 1% higher at $4,484.02 an ounce by 22:50 ET (03:50 GMT), after touching a record high of $4,497.82/oz earlier in the day.

Gold futures for February jumped 1.3% to a peak of $4,530.30/oz.

US-Venezuela tensions drive haven demand
Haven-linked demand for gold and other precious metals was driven up by heightened tensions between the U.S. and Venezuela, after the U.S. navy was seen attempting to seize a third oil tanker linked to the South American country.

Trump kept up his rhetoric against Caracas and President Nicolas Maduro, warning of a potential naval offensive. Trump also said the U.S. will keep the oil from Chinese tankers seized off the coast of Venezuela.

Elsewhere, Iran running a missile drill also ramped up tensions in the Middle East, especially after reports said Israel planned to brief Washington on more potential strikes against Tehran.

Fed easing bets support bullion.

The backdrop of softer U.S. inflation further supported the rally. Last week's U.S. consumer price index came in below expectations, reinforcing market bets that the Federal Reserve will deliver multiple rate cuts in 2026 to support the economy.

Lower interest rate expectations tend to reduce the opportunity cost of holding non-yielding bullion, making gold more attractive relative to interest-bearing assets.

A weaker U.S. dollar and subdued Treasury yields also contributed to bullion's strength. In this thin year-end trading, these factors amplified price moves, with gold advancing as investors rebalanced portfolios toward defensive positions ahead of the holidays.

Source: Investing.com