Citibank has stated that Venezuela could sell gold reserves to raise funds for the struggling country. David B. Wilson and Aakash Doshi wrote the report.
“Cash-strapped nations could trigger further downside price risk as the temptation to sell gold reserves mounts,” the analysts said in the Aug. 18 report. “Venezuela is one such country at risk.” Crude oil prices have hurt Venezuela, which receives over 95% of its export revenues from oil.
Earlier this year the country did sell off some of its gold reserves. In March Venezuela was declared a National Security threat by President Obama. With new sanctions on certain officials, China would no longer be able to fund Venezuela. And so Reuters reported that Venezuela’s central bank was in talks of creating a gold swap to monetize $1.5 billion of the metal. That caused the gold price to fall. Venezuela leader Hugo Chavez had put most of the country’s money into gold.