Kochi: Gold prices in Kerala crossed the psychological barrier of 1 lakh rupees per sovereign on Monday, driven by a sharp rally in international markets following the US military capture of Venezuelan President Nicolas Maduro over the weekend.

One sovereign, equivalent to eight grams of 22-carat gold, climbed 1,160 rupees to reach 1,00,760 rupees on January 5, marking the first time this year that prices have breached the six-figure mark in the state. Per-gram rates rose 145 rupees to 12,595 rupees.

The surge follows heightened geopolitical tensions after US forces conducted a large-scale military operation in Venezuela on January 3, codenamed "Absolute Resolve," capturing Maduro and his wife on drug trafficking charges. President Donald Trump subsequently stated the US would "run the country until such time as we can do a safe, proper and judicious transition".

Safe-Haven Demand Drives Rally

International spot gold prices jumped 1.9 per cent to $4,411.14 per ounce on Monday, with US gold futures rising to $4,419.90. The precious metal's role as a safe-haven asset came into sharp focus as investors sought protection from geopolitical uncertainty.

"The tensions seem to be gradually escalating," said David Wilson, a commodities strategist at BNP Paribas. Market participants noted that the Venezuela crisis reinforced gold's position as a hedge against uncertainty.

Silver prices also surged, with domestic markets recording an increase of 8,000 rupees per kilogram in a single day.

Volatility Marks Recent Trading

Kerala's gold prices have experienced sharp fluctuations in recent weeks. The state recorded an all-time high of 1,04,440 rupees per sovereign on December 27, before retreating to 99,040 rupees on January 1, a two-week low. Saturday's price stood at 99,600 rupees before Monday's jump.

India is one of the world's largest gold consumers, with Kerala alone contributing over 20 per cent of the country's gold consumption. International gold prices gained approximately 65 per cent in 2025, their strongest annual performance in more than four decades, fueled by central bank purchases, expectations of lower interest rates, and persistent geopolitical tensions.

Beyond Venezuela, analysts cite ongoing uncertainties, including trade tensions, Federal Reserve policy expectations, and sustained central bank buying as factors supporting gold's continued strength in 2026.