Venezuela Sells Part of Gold Reserves for US$1 Billion

The Financial Times reported that Venezuela has traded a portion of its gold reserves for $1 billion in cash via a “complex agreement with Citi.” The country, which is suffering from inflation, shortages of everyday items and a shrinking economy, is in dire need of US dollars.

As quoted in the market news:

The precise structure of the deal is unclear but, according to recent media reports, Caracas has pledged 1.4m troy ounces of gold — the equivalent of 3,500 gold bars or 14 per cent of the UK’s gold reserves — in exchange for about $1bn in cash. Venezuela will also pay interest on the funds, the reports said.

At current prices, the bullion is worth almost $1.7bn, providing Citi with a cushion should prices fall. Gold has fallen 36 per cent since reaching a peak in 2011 but is up 1.8 per cent so far this year to around $1,200 a troy ounce.

Citi declined to comment on the deal.

Click here to read the full Financial Times report.