Who gets Venezuela's gold?

The President of Venezuela and his rival Juan Guaido are conducting a legal fight about the gold of Venezuela. More than €1.5 billion worth of gold bars are stored at the Bank of England, but due to economic sanctions, the central bank wants to Do not release. At the same time, opposition figure Juan Guaido is trying to lay claim to the gold, as more than sixty countries recognize him as president of Venezuela. The two parties are now battling it out in court, where the central question is who is actually the president.

Venezuela is in a deep economic crisis due to poor economic policies, low oil prices and economic sanctions. Due to the crisis, its own currency has become virtually worthless, so that the country can only import goods with currency reserves and gold. For example, Venezuela has already had to sell a large part of its gold reserves in recent years. Some of the gold is still with the Bank of England, but they refuse to hand it over. Maduro's argument that he needs the money to to combat the coronavirus crisis yielded no results.

Who owns the gold?

According to Venezuela's central bank, which is on Maduro's side, diplomatic actions by the British government show that Maduro is still the president. This is evident from diplomatic documents regarding sanctions and from the fact that the embassy of Venezuela received correspondence about Queen Elizabeth II's birthday last year. There would also still be diplomatic ties with a large number of Western European countries.

Juan Guaido, who is backed by the U.S. government, believes he should have control over the central bank and gold. He bases his decision on the fact that a large number of countries have recognized him as president of Venezuela. Yet in practice there is little sign of this, because Maduro is still in control. He receives economic and military support from allies such as Russia, China and Iran.

Bank of England

The Bank of England plays an important role in this matter. It is a political decision not to release the gold, setting a precedent for other countries. The British central bank keeps about 400,000 gold bars, much of which is owned by other central banks. This incident is a signal to all other central banks that they are at political risk by holding gold with the Bank of England.

It is therefore no coincidence that more and more countries are repatriating gold. Austria, Hungary and Poland, for example, have already taken gold from London in recent years. Earlier, Germany and the Netherlands repatriated some of their gold from the U.S. Venezuela has now discovered the risks of gold stored in another country. Maduro now runs the risk of not seeing that €1.55 billion in gold again. The British court will deliver its verdict in August or September. We will continue to monitor this for you.

This contribution was made from Geotrendlines