Barron’s: 2 Experts Question Venezuela’s Gold, Cash Stats

The latest data show Venezuela had  roughly $10.5 billion in reserves at the end of 2016 — most of it gold — with which it must meet this year’s debt obligations.

As Venezuela’s socialist economy suffocates under the weight of debt obligations, it is saddled with OPEC’s agreement to curb oil production — Venezuela’s major source of revenue. Analysts monitoring its montly debt and amortization payments note that April is a big month, with more than $2 billion due. Russia and China have helped shore up the nation’s balance sheet, with promises of future energy shipments and the use of U.S. Citgo refineries as part collateral, and for now no one is predicting default.

But the just-released data for the end of 2016 show Venezuela is struggling, with $7.7 billion in gold based on a 9-month trailing price of $1,272.42 per ounce, according to Caracas Capital. That’s down from $10 billion in gold reserves reported at the end of 2015 at a lower gold price, according to Russ Dallen at Caracas Capital.  He adds that the gold figure is nearly half of the reported $14.6 billion in gold Venezuela reported at the start of 2015, and he thinks the government  sold more than $2.3 billion in gold, as reported, to authorities in Switzerland last year.

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