U.S. government imposes sanctions on Venezuela's gold sector

The U.S. government has imposed new sanctions on Venezuela Imposed to disrupt the country's gold market. This measure is an attempt to further increase the pressure on Venezuelan President Maduro, because the export of gold is an interesting source of income for the government.

In the first nine months of this year, Venezuela has already exported 23.62 tonnes of gold to Turkey, generating $900 million. That's only a fraction of the country's revenue from oil exports, but for the U.S. government, that amount is apparently enough to impose new sanctions.

The new sanctions give the U.S. government the power to freeze all assets and assets of individuals working in Venezuela's gold sector or providing financial, technological, or material support to Venezuela's gold sector. This broad definition makes it difficult to assess the impact of these new sanctions on Venezuela's economy.

New US sanctions on #Venezuela Target Gold Exports. pic.twitter.com/U0OsKGYgBU

— Steve Herman (@W7VOA) November 1, 2018

Venezuela urges people to buy gold

Last summer, the government of Venezuela launched another Advertising campaign to encourage the population to buy gold. In an appearance on national television, President Maduro showed two small gold bars, which savers can buy to protect their assets against hyperinflation. The Venezuelan bolivar has become virtually worthless, causing wealthy individuals to look for alternatives to store their wealth.

Venezuela's economy was hit hard by the drop in oil prices in 2016. An important source of income was lost, so the country had to turn on the printing press to finance the import of goods. Now that the currency is virtually worthless, Venezuela is starting to draw on its own gold reserves.

This year, the country exported part of its gold reserves to Turkey, where the precious metal was smelted for sale on the international gold market. The Venezuelan government's decision to export gold to Turkey instead of Switzerland was Entered fear of new sanctions. That fear turned out to be not unjustified.

This contribution was made from Geotrendlines