Gold and silver surge, after Venezuela "everyone is on edge"

After the United States arrested Venezuelan leader Maduro, investors flocked to precious metals for safety.

According to CCTV News, on Monday local time, Venezuelan President Maduro, who was forcibly controlled by the United States, and his wife Flores appeared in the Southern District Federal Court in New York for the first time, and expressed "not guilty" to the so-called "charges" from the U.S. side.

At the opening on Monday, safe-haven funds surged into the precious metals market. Spot gold broke through $4,400, and spot silver rose by 5%, with New York silver once soaring nearly 10% during the day. Copper prices continued to rise amid concerns over pre-stocking driven by tariff expectations and supply disruptions.

(Gold, silver, copper, and platinum surged on Monday)

Analysts believe that the recent fluctuations in commodity prices reflect a "metal war" that is unfolding, with countries competing to secure key resources to participate in the accelerating artificial intelligence race. Analysts point out that Venezuela, in addition to oil, also possesses significant gold and copper resources, and the United States intends to strengthen control over these resources.

Venezuelan Mineral Resources Become the Focus

Analysts note that, in addition to the U.S. intention to control Venezuelan oil resources, the country's mineral reserves are also attracting attention, as the U.S. hopes to prevent these resources from flowing to Venezuela's allied countries.

David Morgan, editor of The Morgan Report, stated on Monday:

Less known is that Venezuela also has significant gold resources and production activities, although the mining business has struggled under decades of poor economic management and sanctions.

The Brisas mine in southern Venezuela has one of the largest gold and copper deposits in the world.

In recent years, central banks around the world have significantly increased their gold purchases, especially after the Russia-Ukraine conflict in 2022. This trend reflects sovereign nations' growing concerns about asset security and a re-examination of the traditional reserve currency system.

Gold, as a traditional safe-haven asset, is often sought after during times of heightened geopolitical tensions. The arrest of Maduro further reinforces the market's vigilance regarding national sovereignty risks.

Escalation of the Key Mineral Competition

Silver and copper have also surged significantly in recent months, after the U.S. included them in its critical mineral list, deeming them essential to the U.S. economy and national security. Morgan pointed out:

Venezuela's silver production is relatively small, which means silver prices are more likely to be driven by broader macro factors rather than the Venezuelan supply fundamentals.

About 60% of silver is used for industrial purposes, including solar panels, data centers, and electric vehicle batteries. This has made silver's strategic position increasingly prominent in the AI race and energy transition. In the past month, a shortage of silver supply has driven spot silver prices to soar nearly 45% (Spot silver price trend over the past month)

The competition among countries over key minerals is reshaping the landscape of the commodity market. Analysts believe that investors need to closely monitor the ongoing impact of rising resource nationalism on supply chains and prices