Global financial markets are navigating fresh political turbulence this Monday morning, as investors react to a dramatic military intervention in Venezuela over the weekend.
Safe Havens in Demand After Political Shock
The trigger was a strike authorised by US President Donald Trump last Saturday, which led to the capture of Venezuelan President Nicolás Maduro and his wife, Cilia Flores. This unexpected geopolitical event has sparked an immediate dash for traditional safe-haven assets as trading resumes after the Christmas and New Year break.
Gold has jumped by more than 2% this morning, reaching $4,420 per ounce, moving back towards the record highs set in late December. Silver has seen even stronger gains, rising around 4% to $75.50 per ounce, building on its robust performance in 2025.
Defence Sector Shares Rocket Higher
While safe havens attracted bids, the clearest market movers were shares in major defence contractors, particularly in Asia. Investors are betting that heightened geopolitical tensions could lead to increased military spending.
In Tokyo, shares of defence contractor IHI soared by 9%, while industrial giant Mitsubishi Heavy Industries climbed 8.4%. In South Korea, Hanwha Aerospace, a leading defence firm, saw its stock rise by 7%.
Ipek Ozkardeskaya, a senior analyst at Swissquote, noted that while markets are "barely flinching" overall, a risk premium is creeping back into asset prices. "Unsurprisingly, safe-haven assets — led by gold — are enjoying a positive ride this morning," she explained.
Broader Market Reaction Muted
Despite the moves in precious metals and defence, the analyst pointed out there is "no particular sign of stress or lack of appetite across risk assets". The Swiss franc has softened against a broadly stronger US dollar, and most Asia-Pacific stock markets have actually risen today.
The focus now shifts to key economic data releases scheduled for later today, which could steer sentiment. The agenda includes the Bank of England's money and credit report and mortgage approvals data at 9.30am GMT, followed by the influential ISM survey of US manufacturing at 4pm GMT.
This episode underscores how markets, still in a holiday mood, are being forced to swiftly recalibrate in the face of sudden political shockwaves emanating from Washington and Caracas.
