The Minister for Economy and Finance, Nelson Merentes, has issued a new resolution which has the affect of increasing the amount of gold that local producers must market inside of Venezuela. The new resolution, which was recently announced in the Gaceta Oficial No. 39.169., requires that at least 70 percent of production must be marketed within sovereign Venezuelan territory. Of that amount, 85 percent must be offered for sale directly to the Central Bank of Venezuela with the remainder going to the domestic processing industry. If the Central Bank refuses to purchase the gold, producers will still have the right to sell it elsewhere.
The move appears aimed at increasing Venezuela’s gold reserves while reducing reliance on supporting them with U.S. dollars. The resolution, in conjunction with the currency control regime in place pegging the Venezuelan Bolivar at 2.15 to the US Dollar (the unofficial “black” market rate has the Bolivar trading at over 6 to the Dollar), would result in gold being sold domestically at a significantly lower price than the current international market price for gold.