When Venezuela first announced its intention to return to its territory the gold it stores in England, the press reported 211 tons of gold in the vaults of the Bank of England. But then came a clarification: the Bank of England only stores 99 tons of Venezuelan gold, the rest of the gold is distributed among the banks JP Morgan Chase, Barclays, Standard Chartered and Bank of Nova Scotia; they are all banks specializing in gold transactions.
When this fact became known, it was the first bell for the gold market. In fact, in this case, it is not just a matter of storing gold in the vaults of the Bank of England (which would be the lesser evil), but of the fact that gold was most likely used in various financial transactions. And this is another turn of events with Venezuela’s gold, which has not yet been returned. The Financial Times described Venezuela’s gold seizure as “one of the largest physical gold transfers in modern history.” As the news leaked to the masses, the price of gold rose to $ 1,875 an ounce.
Going back two weeks ago, it is possible that the significant increase in gold in the last two weeks was associated precisely with the gold of Venezuela, which the banks already knew in advance.
Venezuela’s gold is unlikely to be in the vaults of previous banks and is waiting to be sent to Venezuela. Most likely it was lent some time ago to other banks, which probably already sold it. Thus, most of this gold looks like it has already been destroyed and the banks will have to work hard to recompose this part of Venezuela’s gold.