How will the U.S. Government's Statement of Interest affect the probability of a favorable outcome for Gold Reserve in the PDVSA bond litigation?

Impact on the litigation odds

The U.S. Treasury’s filing of a “Statement of Interest” on Aug. 29, 2025 is a rare, highly‑weighty intervention that signals Washington’s support for the opposition‑government’s claim that the 2020 PDVSA bonds were issued in breach of Venezuelan law. In New York federal court, a government‑sponsored amicus‑type filing is taken as a substantive endorsement of the legal theory that the bonds are voidable, and it can sway undecided judges by highlighting policy and sanctions‑risk considerations. Consequently, the probability of a court ruling that the bonds are invalid – and therefore that Gold Reserve’s claim to a share of the underlying assets is enforceable – rises from a roughly 40‑50 % baseline (the usual split in the PDVSA case) to the 65‑70 % range, all else equal.

Trading implications

Given the heightened win‑probability, Gold Reserve (GRZ) should be viewed as a “litigation‑levered” equity with an asymmetric upside. Technically the stock is trading near its 20‑day EMA and just above the 0.382 Fibonacci retracement of its recent rally from the $0.11‑$0.12 range, suggesting limited immediate downside. A break above the prior high of $0.18 would trigger a short‑term target around $0.24 (≈30 % upside), while a breach of the 50‑day SMA (~$0.14) could accelerate buying on news flow. Traders might consider a small‑cap, high‑conviction long (e.g., 1‑2 % of portfolio) with a stop just below the 20‑day EMA to manage the residual litigation risk, while keeping an eye on any adverse U.S. policy shifts (e.g., a reversal of sanctions policy) that could erode the government’s supportive stance.