Geopolitical Shock: Gold Surges as US Captures Venezuelan President; Oil Reaction Muted

Global markets opened 2026 with a significant geopolitical shock after US forces conducted a military operation in Venezuela, seizing President Nicolás Maduro and transferring him to New York to face charges. The unprecedented move has ignited a flight to safety in precious metals, though energy markets have shown a divergent, muted response.

Safe-Haven Rush: Gold Breaches $4,370

Spot gold (XAU/USD) rallied sharply in Asian trading on Monday, climbing nearly 1.8% to regain the $4,370 level. Investors are pricing in elevated geopolitical instability, not just from the regime change in Caracas, but from the potential for broader regional fallout.

Market strategists at MKS PAMP noted that the seizing of a head of state creates “massive uncertainty,” historically a primary driver for bullion. The reaction is compounded by President Trump's simultaneous renewed rhetoric regarding the purchase of Greenland, which prompted a sharp diplomatic rebuke from Denmark, adding to the perception of an aggressive, unpredictable US foreign policy stance.

The Oil Paradox: Why Prices Aren't Spiking

Despite the turmoil in a nation holding the world's largest proven oil reserves, crude benchmarks (WTI and Brent) traded slightly lower or flat.

Goldman Sachs suggests that in the long term, a US-backed regime change could actually be bearish for oil prices. If US oil majors like Chevron are permitted to rehabilitate Venezuela’s dilapidated infrastructure, significant new supply could enter the market by 2027-2030, exacerbating the global glut.

Diplomatic Fallout

The aggressive US move has drawn condemnation from China, Russia, and a bloc of six Latin American nations including Brazil and Mexico, who warned of a “dangerous precedent.” The UN Security Council is scheduled to meet Tuesday to discuss the crisis, keeping risk appetite fragile.