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Life is uncertain, nebulous, and rampant with ambiguity. As each page turns, we become more apprehensive of our surroundings, our future, and especially our investments. Over the past century, the world has been plagued by several financial crises. Amidst these crises, several investments that were once the talk of the town were reduced to nothing. However, throughout this tumultuous period, only one asset has preserved its value, that asset being gold. Gold is regarded as the most secure asset one can possess, and the last time it lost its value was approximately 900 years ago, due to Mansa Musa’s widespread magnanimity.

However, is it entirely plausible that Gold’s period as “Mr consistent” might come to an end after the abduction of Venezuelan President Nicholas Maduro? Venezuela is known as the wealthiest nation in the world, as it has untapped natural resources amounting to 14.3 trillion dollars. Of that 14.3 trillion dollars, gold constitutes for 322 billion dollars. Given the fact that the bulk of gold mines haven’t been extracted, and the U.S. President was recorded proclaiming, “We’re gonna make a lot of money”.  Such a statement can only imply one thing: “The United States of America plans to seize control of all of Venezuela’s assets.”  However, the question prevails: “What will happen to the prices of gold?”

The previous 5 years have witnessed gold reach unfathomable peaks consistently. Given the volatility of the financial markets, sky-high inflation, and lack of transparency by investment firms, people have turned to safer investments that guarantee steady returns. Due to the vast majority delving into the purchase of this asset and its scarcity, gold has been soaring like an eagle, but how will the extraction of 322 billion dollars worth of gold affect its price in the market?

Venezuela possesses an estimated 74.98 million ounces of gold, which equates to approximately 2,343 tons. Such substantial numbers place Venezuela as the 5th largest holder of gold globally. However, the reality is considerably more complex: roughly 30 percent of identified gold reserves are contained within a single project, Siembra Minera, which remains in the prefeasibility and scoping stage, and of the country’s 24 gold mines that have reserve data, 19 are inactive, 3 are temporarily suspended, and only 2 are currently active. Venezuela’s Central Bank currently holds approximately 161 metric tons of monetary gold reserves. The Brisas deposit alone, previously confiscated from Gold Reserve Ltd., holds about 10 million bullion ounces worth about $44.4 billion based on Monday’s gold price.

The arrest of Maduro resulted in a short-term surge as gold rose by 2.9 percent on Monday. Analysts believe that the capture of Maduro is likely to significantly increase the price of gold, even experiencing a gap up in Monday morning trading. On the geopolitical front, this unprecedented arrest reinforced the already blatant uncertainty between America, China, and Russia. Christopher Wong, an analyst at Oversea-Chinese Banking Corp, stated, “The intervention represents Washington’s most direct Latin American action since 1989, amplifying safe-haven demand.”

Disregarding the short-term reaction by the market, the consensus seems to be in favour of gold maintaining its intrinsic value all across the globe. Bernard Dahdah, an analyst at Natixis, said in a note, “This is because Venezuela’s current gold production is minimal and heavily constrained by infrastructure decay.”

Theoretically speaking, if American companies successfully develop Venezuela’s dormant gold assets, this could eventually add significant supply to the market. However, investors would need clear and enforceable laws that would not be subject to any sort of scrutiny. On top of that, their investments will need to be shielded by political stability and verifiable economic reforms. Any disruptions in the form of regime change or violent protests will severely threaten their investments. The timeline for meaningful production increases would likely span 5-10 years, given substantial infrastructure requirements and comprehensive economic reforms.

The Venezuela situation unfolds against an already historic backdrop. Central bank buying, which topped 1,000t for the third consecutive year in a row, along with a return of Western ETF investment, lifted gold demand to a record of 4,974t (US$382 billion). If this situation persists, then gold is on track to record fresh highs next year, supported by safe-haven demand, including continued central bank buying.

The current price trajectory suggests gold is on track to hit $5,000 by the end of 2026. Bank of America projects gold to average $4,538 per ounce through 2026. Rather than fundamentally altering the market, the Venezuela situation reinforces existing bullish dynamics by adding another layer of geopolitical uncertainty and demonstrating the erosion of international order.

Even if the U.S. were to immediately liquidate Venezuela’s 161 tons of monetary reserves or eventually bring Venezuela’s 2,343 tons of in-ground reserves to market, the global gold market could absorb this relatively easily over time. Annual gold mine production globally exceeds 3,000 tons, and central bank buying remained elevated at 220 tons in just Q3 2025 alone.

America’s capitalization of Venezuela’s gold is unlikely to substantially alter the gold market’s trajectory for several compelling reasons. The first one, Venezuela’s reserves, while meaningful, represents less than one year of global mine production. Another one being actual production increases would take 5-10 years to materialize. Furthermore, the gold market is currently driven by structural factors (central bank buying, investor ETF flows, geopolitical hedging). The intervention itself strengthens gold’s safe haven appeal by demonstrating geopolitical instability and the weaponization of international law.

The immediate 2-3% price spike reflects temporary safe-haven flows rather than fundamental supply concerns. The longer-term impact will depend on several critical factors, such as the election of the new Venezuelan government, the development of infrastructure in the country, and the implementation of actual economic and political reforms in the country.

Even then, gold’s value in global markets will remain unfazed, as there is no asset more reliable than this precious commodity.