Robert Harneis –TDO- (FRANCE) - Reports are emerging that the Bank of England are refusing to release the Venezuelan gold holdings.

Reuters recently revealed that the Bolivarian Republic had requested the Bank to return its gold two months ago. It has supposedly not been moved because of difficulties in arranging insurance.

The 14 tonnes of gold is important in Venezuela’s sanctions battle with Washington as it can be used to secure trade deals without using the dollar. It is also important in Venezuela’s recent moves away from dependence on the dollar in favor of euros, yuan and ‘other convertible currencies’.

The reason recited in the Times newspaper was that ‘There are concerns that Mr. Maduro may seize the gold, which is owned by the state, and sell it for personal gain,’. The newspaper cited unnamed official sources. Reportedly the Bank of England has asked the Venezuelan government to explain what it intends to do with the gold.

At the same time Washington has announced an extension of its Venezuelan sanctions program to cover gold transactions. London is clearly acting under pressure from Washington as any interference with gold holdings by foreign states is damaging to the UKs reputation as a reliable place to store gold. It is significant that London is a major insurance center and pressure may have been put on insurers not to cover the risk and thus make repatriation difficult.

A number of countries have recently been repatriating their gold with a view to the deteriorating financial climate where gold could be used as security by the host country without the consent of the owner. National independence is also an increasing concern as Washington tries increasingly to control the actions of foreign states through sanctions.

The latest gold repatriation trend was kicked off by Germany last summer when the central bank completed the move of 674 metric tons from the vaults of the Federal Reserve Bank of New York and the Banque de France three years ahead of schedule. And prior to that, Germany had repatriated 940 tons of gold from the Bank of England.

Hungary followed in March when the country’s central bank said that it is planning to bring back 100,000 ounces of gold back from London.

Turkey in particular has taken a strong position, bringing gold back to Istanbul. President Erdogan has suggested that IMF loans should be repaid in gold not dollars. Turkey has also collaborated with Venezuela by refining gold and returning it to Caracas.

China, India and Russia have consistently built up their gold reserves over recent years with Russia now holding 2000 tonnes.

If the Bank of England refuses to return Venezuelan gold to its rightful owner to please the USA it will not only damage its reputation as an independent financial center but encourage other states to keep their gold at home.

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