Investing In Gold And Silver For Capital Preservation And Appreciation

Gold Mining Industry going through changes in Venezuela

Venezuelan President Hugo Chavez ordered his government to repatriate $11 billion in gold held in banks abroad to safeguard the country from the economic crisis and said he'll nationalize the local gold industry.


Venezuelan President Hugo Chavez ordered his government to repatriate $11 billion in gold held in banks abroad to safeguard the country from the economic crisis and said he’ll nationalize the local gold industry.

Venezuela has about 211 tons of its 365 tons of gold reserves held abroad at institutions including the Bank of England, JPMorgan Chase & Co. (JPM), Barclays Plc (BARC), Standard Chartered Plc (STAN) and the Bank of Nova Scotia (BNS), according to a government document. “We’ve held 99 tons of gold at the Bank of England since 1980. I agree with bringing that home,” Chavez said today on state television. “It’s a healthy decision.”

Some other steps Chavez has introduced in his strategy is to diversify into emerging markets including China, Russia, Brazil, and India or the BRIC nations are they are known. Close to $6.3 billion will be shifted into BRIC nations, said the Central Bank of Venezuela President Nelson Merentes at a news conference.

Brutal Place

Chavez wants to put a lid on the illegal mining that goes on in the country. The government is preparing a decree to stop illegal miners exploiting deposits of gold and coltan, an ore containing tantalum, used in mobile phones and video-game consoles, he said.

President Chavez has slowly been nationalizing certain industrial sectors in the nation since 2006 including the oil, petrochemicals, cement, metal, mining and telecommunications industries. Venezuela faces international arbitration over nationalized gold assets from three companies including Crystallex International Corp. (KRY)

Investors are quite weary of placing their capital in Venezuela. The regime, the administration, and in general the capital markets have a reputation for being disorderly and unpredictable. And given current market turmoils no one is interested in adding another layer of complication to their investment world.

In an effort to boost production and benefit from the rising prices, the state relaxed its restrictions on gold exports. It allowed companies in joint partnership with the government to send as much as 50 percent of their production abroad. Venezuela state gold producer Minerven has been shut for 15 days amid a strike, newspaper El Mundo reported today, citing company President Luis Herrera.

Want to find out more about trading in Gold, Silver, and Platinum, then visit the most informative site:learn to invest in precious metals.

, , , , , , , , ,