Gold price rises after US captures Venezuela’s Maduro

In the early hours of Monday morning trade across Asia, the benchmark price for gold surged by approximately 1.8%, reaching an impressive $4,408 (equivalent to £3,282) per ounce. This robust upward movement underscores a broader trend of investor caution. Concurrently, silver, often trailing gold but mirroring its safe-haven appeal, also experienced a significant leap, climbing by close to 3.5%. The pronounced demand for both metals highlights a collective investor response to perceived instability, channeling capital into assets historically known to retain or even appreciate in value during periods of market turmoil and political upheaval.

While precious metals soared, the broader energy markets and regional equities presented a more nuanced picture. Crude oil prices, despite the direct involvement of the US in a major oil-producing nation, remained largely unchanged, exhibiting only marginal fluctuations throughout the morning. Meanwhile, share prices across various Asian markets surprisingly trended mostly higher, suggesting that for many equity investors, the immediate fallout from the Venezuelan situation was either contained or overshadowed by other, more positive economic indicators.

The latest surge in gold and silver comes on the heels of an already remarkable period for these precious commodities. Both metals had previously achieved unprecedented record highs earlier in 2025, before experiencing a modest pullback in the final days of the preceding year. This recent dip, however, proved to be a temporary blip in what has been an extraordinary bull run for gold, especially.

Indeed, even with the slight year-end decline, gold recorded its most impressive annual performance since the landmark year of 1979, skyrocketing by more than 60%. This phenomenal ascent culminated in an all-time peak of $4,549.71 per ounce, which was reached on December 26th. Several powerful macroeconomic and geopolitical forces converged to fuel these extraordinary gains. A primary driver was the growing expectation of more aggressive interest rate cuts by major central banks globally. Lower interest rates typically diminish the opportunity cost of holding non-yielding assets like gold, making it a more attractive investment compared to bonds or savings accounts.

Adding to this momentum were substantial and sustained purchases of bullion by central banks worldwide. This strategic accumulation, often seen as a diversification away from traditional reserve currencies and a hedge against global economic instability, signaled a collective move by nations to bolster their financial resilience. Furthermore, pervasive investor concerns about escalating global tensions and persistent economic uncertainty across various regions provided a constant undercurrent of demand for gold’s perceived stability. The capture of Maduro has now added a fresh, potent catalyst to this existing mosaic of geopolitical risks, reinforcing gold’s role as a vital hedge.

Shifting focus to the energy sector, crude oil prices initially fluctuated in early trade, settling slightly lower by mid-morning. This muted reaction reflected investors’ cautious weighing of whether Washington’s audacious intervention in Venezuela would genuinely affect global crude supplies in the short term. US President Donald Trump, in a bold declaration following Maduro’s capture, vowed to harness Venezuela’s immense oil reserves, stating unequivocally that the US would "run the country until such time as we can do a safe, proper and judicious transition." This statement signaled a potentially transformative shift in global energy dynamics, at least in theory.

However, industry analysts were quick to temper expectations regarding any immediate impact on energy costs for consumers and businesses. Experts widely concurred that, despite the dramatic political developments, the move was unlikely to translate into an instant change in crude oil availability or pricing. A key factor underpinning this assessment is the severely dilapidated state of Venezuela’s oil infrastructure. It has been in a sharp and sustained decline since the early 2000s, suffering from years of underinvestment, mismanagement, and the crippling effects of international sanctions.

Restoring Venezuela’s once-mighty oil production capabilities to their former glory would necessitate an astronomical investment, estimated by experts to run into billions of dollars, alongside a multi-year effort to rebuild and modernize its crumbling facilities. Vasu Menon, an investment strategist from OCBC bank, highlighted that Venezuela’s crude production has been "lacklustre" for many years, now accounting for a mere fraction—around 1%—of total global oil output. This significantly diminished capacity means that even a dramatic political shift, while symbolically powerful, does not immediately translate into a material change in global supply dynamics. The sheer scale of the logistical and financial challenge in revitalizing Venezuela’s oil sector dampens any immediate market reaction to the political upheaval.

Despite the significant geopolitical event unfolding in Venezuela, share markets across the Asia-Pacific region largely registered gains. This seemingly counter-intuitive performance indicated that investors in these markets were primarily focused on, and reacting to, news and developments unrelated to the unfolding situation in Caracas. Japan’s Nikkei 225, a key regional benchmark, notably advanced by 2.6% on the first trading day of the year, buoyed by fresh economic data indicating a stabilization in manufacturing activity in December. Similarly, major stock indexes in South Korea and China also closed higher, reflecting a broader regional optimism.

According to Zavier Wong from investment firm eToro, these positive jumps in Asian equities reflect a prevailing confidence among investors that the potential fallout from the events in Venezuela will remain geographically distant and localized, without broadly disrupting global trade or economic stability. This sentiment suggests a decoupling, to some extent, of regional equity performance from the immediate geopolitical shockwaves. Shigeto Nagai from Oxford Economics further corroborated this view, explaining that the strong share price gains observed in Japan and South Korea today "mainly reflects the AI-led rally in the US on Friday." This suggests that the positive momentum generated by advancements and investor enthusiasm in the artificial intelligence sector, particularly in the American market, had a more dominant influence on Asian trading than the political upheaval in South America. The global nature of technological progress and its perceived economic benefits thus overshadowed, for many equity investors, the immediate concerns arising from the US intervention in Venezuela.