Silver Hits Record $66 as Venezuelan Blockade Sparks Flight to Safety
Gold also climbs as reports of a US naval blockade against Venezuelan oil tankers rattle markets and trigger a rush into haven assets.
Precious metals surged on Tuesday, with silver rocketing to a record high, as investors scrambled for safe-haven assets amid escalating geopolitical tensions in the Caribbean. The catalyst was a report of a U.S. naval blockade of Venezuelan oil tankers, sparking fears of a new flashpoint in global energy supplies.
Silver (XAG/USD) jumped more than 4% to touch a new all-time high of $66 per ounce in morning trading, a dramatic move that underscores rising market anxiety. Gold (XAU/USD), the traditional barometer of investor fear, also climbed significantly as capital rotated out of riskier assets and into perceived stores of value.
The market’s abrupt risk-off turn followed a report from The Washington Post stating that the U.S. had ordered a “total” blockade of tankers carrying Venezuelan oil. The move threatens to halt a significant portion of the country's crude exports, a development that could have wide-ranging consequences for the global economy and energy markets.
Investors reacted swiftly to the news, seeking shelter from potential instability. The surge in silver and gold is a classic flight-to-safety trade, where market participants sell assets like stocks, which are more sensitive to economic turmoil, and buy precious metals. The price action, confirmed by Bloomberg, highlights the market's sensitivity to geopolitical shocks, particularly those involving major oil producers.
Analysts noted that a sustained blockade could lead to a spike in crude oil prices, further complicating the global inflation picture and potentially hurting corporate profits. The action against Venezuela, an OPEC member, introduces a new and volatile element into a market already contending with tight supplies.
Market participants are now closely watching for official confirmation from the White House and the Pentagon, as well as the response from Caracas. Any signs of military escalation or retaliatory measures from Venezuela or its allies, such as China and Russia, could inject further volatility into commodity and equity markets worldwide. For now, the focus remains firmly on the flow of capital into the traditional havens of gold and silver as traders brace for the potential fallout.