Venezuela’s Mysterious Gold

As Nicolas Maduro is learning, it’s not always easy being president of Venezuela. Struggling to hold on to power in a country that has collapsed economically and spiritually, opposition forces are demanding his resignation. The U.S. has imposed broad sanctions against the country and has recognized Juan Guaido as Venezuela’s interim leader. Thus far, in a tension-filled week, Maduro has refused to step aside.

At one time, Venezuela’s oil and gold reserves made it the richest country in South America. Now, the oil fields are destroyed, and what is happening with the gold is shrouded in mystery. Venezuelan gold reserves have plunged from a high of 372 tons in 2011 to 150 tons in 2018. Maduro is desperate for cash in his battle against the opposition. As a last-ditch measure, he reportedly is trying to sell what is left of Venezuela’s gold reserve for cash.

Twenty tons of gold, worth approximately $850 million, is apparently ready to be shipped, most likely to the United Arab Emirate. This amounts to 20 percent of Venezuela’s total gold holdings. However, a Russian plane seen in Caracas that was allegedly carrying the gold to Dubai landed without any precious metal. People are wondering, what is happening with the gold, which has been weighed and is ready to be shipped.

President Trump has blocked the export of Venezuelan oil to the U.S. This has been Venezuela’s primary source of revenue, making the state of its gold reserves even more important. Gold once provided the country with much-needed income, but these reserves have greatly diminished during Maduro’s reign. The country’s foreign reserves have plunged to $8.4 billion, a decrease of 76 percent. Some of the gold is being held in Turkey. The Bank of England is holding $1.2 billion worth of Venezuelan gold. No one is quite sure how much gold is left in Venezuela itself. The last glimpse inside Venezuela’s central bank was in 2014 when it held an estimated $15 billion worth of gold.

Before former President Chavez nationalized the country’s mining companies, their output increased by 76 percent in six years. Following nationalization, annual production fell to 3 percent. Gold production has been down since 2011, with only 25.5 tons being mined. In 2017, mining dropped to 23 tons. But mining is being done by a corrupt army, and only 8.5 tons were extracted in 2017. Socialism has been as unkind to Venezuela’s gold mines as it has to its oil industry, leaving both of them destroyed.

Whatever gold Venezuela has managed to hold onto is needed as collateral for loans to rebuild the economy. With the mining industry barely functioning, whatever existing gold Maduro can sell takes on tremendous significance. But if the gold is still waiting to be shipped, what is happening? What exactly are Maduro’s plans?

Maduro is facing a great deal of pressure to relinquish power. He’s in for the fight of his life. Opposition leader Guaido has emphasized the importance of protecting the country’s remaining assets, in which the gold plays a crucial part. It may be the determining factor of who will take charge of Venezuela in the near future. Whoever has the gold will be the last man standing.