Following the US arrest of Venezuelan leader Maduro, investors have flocked to precious metals as safe-haven assets.
According to reports, on Monday local time, Venezuelan President Nicolás Maduro and his wife, who are under US control, pleaded "not guilty" to the so-called "charges" during their initial appearance at the Federal District Court for the Southern District of New York.
When markets opened on Monday, safe-haven capital poured into the precious metals market. Spot gold broke through $4,400, spot silver surged by 5%, and New York silver prices skyrocketed by nearly 10% intraday. Copper prices continued to climb amid expectations of tariffs driving preemptive stockpiling and concerns over supply disruptions. (Gold, Silver, Copper, and Platinum all posted significant gains on Monday)
Analysis suggests that this commodity price volatility reflects an unfolding "metal war," where nations are competing to secure critical resources for the accelerating artificial intelligence race. Analysts point out that beyond oil, Venezuela possesses significant gold and copper resources, which the US aims to bring under tighter control.
Venezuela's Mineral Resources Become a Focal Point
Analysts indicate that aside from the Venezuelan oil resources the US intends to control, the country's mineral reserves are also drawing significant attention, with the US hoping to prevent these resources from flowing to Venezuela's allied nations. David Morgan, editor of The Morgan Report, stated on Monday:
Less widely known is that Venezuela also holds significant gold resources and production activity, although mining operations have struggled under decades of economic mismanagement and sanctions.
The Brisas mine, located in southern Venezuela, contains one of the world's largest gold and copper deposits. In recent years, central banks have substantially increased their gold purchases, particularly after the Russia-Ukraine conflict in 2022. This trend reflects growing concerns among sovereign nations about asset security and a reassessment of the traditional reserve currency system. Gold, as a traditional safe-haven asset, is often sought after during escalating geopolitical tensions. The arrest of Maduro has further heightened market vigilance regarding sovereign risk.
Competition for Critical Minerals Intensifies
Silver and copper have also experienced substantial gains in recent months, after the US included them on its critical minerals list, deeming them essential for the US economy and national security. Morgan pointed out:
Venezuela's silver production is relatively small, meaning silver prices are more likely to be driven by broader macroeconomic factors rather than Venezuelan supply fundamentals.
Approximately 60% of global silver is used for industrial purposes, including solar panels, data centers, and electric vehicle batteries. This elevates silver's strategic importance in the AI race and energy transition. Over the past month, a supply shortage has spurred a surge of nearly 45% in spot silver prices at one point. (Spot Silver Price Movement Over the Past Month) The global competition for critical minerals is reshaping the landscape of commodity markets. Analysis suggests investors need to closely monitor the ongoing impact of rising resource nationalism on supply chains and prices.
