Chavez Orders $11 Billion of Gold Home

Daniel Cancel and Nathan Crooks Bloomberg.com 08/17/2011 06:31

Venezuelan President Hugo Chavez ordered the central bank to repatriate $11 billion of gold reserves held in developed nations’ institutions such as the Bank of England as the metal rises to record levels behind a weakening U.S. dollar.

Venezuela, which holds 211 tons of its 365 tons of gold reserves in U.S., European, Canadian and Swiss institutions, will progressively return the bars to the central bank’s vault, Chavez said yesterday. JPMorgan Chase & Co. (JPM), Barclays Plc (BARC), Standard Chartered Plc (STAN) and the Bank of Nova Scotia (BNS) also hold Venezuelan gold, the president said.

“We’ve held 99 tons of gold at the Bank of England since 1980. I agree with bringing that home,” Chavez said yesterday on state television. “It’s a healthy decision.”

Chavez, whose government depends on oil for 95 percent of export revenue, is looking to diversify Venezuela’s cash reserves from U.S. and European banks to include investments in emerging-markets including Brazil, China, India, Russia and South Africa, central bank President Nelson Merentes said yesterday. Chavez, whose nation is the world’s 15th-largest holder of gold, is bringing back the reserves after a 26 percent rally in price this year.

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