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In recent days, there has been a lot of talk about Venezuela's gold reserves. The government led by President Maduro wants to recover gold from London, but is Thwarted by the Bank of England. In total, there is $1.2 billion worth of gold in London, but the central bank does not want to release it.
In order to be able to get money, Maduro now wants to sell some of the gold that is already in his own country. This is proving to be no easy task, now that all eyes in the world are on Venezuela.
This week, Bloomberg published the message that Venezuela has prepared 20 tons of gold for export, but that the destination for that gold was not yet known. Initially, it was rumored that a Russian passenger plane would pick up the gold in Venezuela and to Russia, but that is being used by the Kremlin Denied. Later, report that a cargo plane from Dubai had arrived at Caracas airport.
Who will eventually take the gold remains unclear for now, but Reuters has strong indications that it will be sent to Dubai Transferred. The news agency writes that Venezuela has sold 15 tons of gold to the United Arab Emirates and will receive euros in the form of banknotes in return within a few days. Reuters writes that Maduro's government wants to export a total of 29 tons of gold. The proceeds will be used to buy food, medicines and other basic goods.
According to Reuters sources, a transport of 3 tons of gold took place on January 26 with a Solar Cargo plane. This Friday, the same airline will pick up 15 tons. Later this month, another 11 tonnes of transport is expected, bringing the total to 29 tonnes. According to the latest figures, Venezuela had a gold reserve of 132 tonnes in November. Just under a quarter of that is still with the Bank of England in London, while a similar amount is being transferred from Venezuela to the United Arab Emirates.
President Maduro is in an awkward position, as the United States and numerous allies have expressed their support for opposition leader Guaido. The U.S. government introduced new sanctions, making it even more difficult for Maduro to sell oil or gold. National Security Adviser John Bolton warned gold traders and bankers not to accept gold from Venezuela. Senator Marco Rubio added that companies transporting Venezuela's gold will be subject to U.S. sanctions.
My advice to bankers, brokers, traders, facilitators, and other businesses: don't deal in gold, oil, or other Venezuelan commodities being stolen from the Venezuelan people by the Maduro mafia. We stand ready to continue to take action.
— John Bolton (@AmbJohnBolton) January 30, 2019
.@UAEEmbassyUS, we have reports that a French national working for @noor_capital is in Caracas today to arrange for the theft of more Gold from #Venezuela. I hope you have advised them that they & any air charter service that does this will be subject to Treasury sanctions.
— Marco Rubio (@marcorubio) January 31, 2019
Venezuela has been struggling with a severe economic crisis for years. Due to the fall in the price of oil, the country lost an important source of income. Instead of implementing structural reforms, the government continued to overspend, which reduced confidence in the currency. The government is running out of foreign exchange reserves and is therefore selling off part of its gold reserves. Last year, the country sold more than 20 tonnes of gold to Turkey. The U.S. Government Examines whether Turkey is violating the sanctions against Venezuela in doing so.
The country's central bank wants to swap gold for euros, because they are easier to trade than dollars. According to Reuters, the central bank has instructed all banks to make euros available to companies. They can use the euros to pay for the import of products. U.S. sanctions are hampering banks' ability to trade dollars. Payments in euros are subject to fewer restrictions, which means that this currency is more often used as an alternative.
This contribution was made from Geotrendlines
