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Venezuelan central bank to increase gold purchases

Section: Daily Dispatches

By Corina Rodriguez Pons
Bloomberg News
Friday, March 5, 2010

CARACAS, Venezuela -- Venezuela's central bank will boost its gold reserves this year and will buy more than half the estimated 20 metric tons of domestic production, bank director Jose Khan said today at an event in Caracas.

The central bank, which has about $16 billion of its $30.6 billion of reserves in gold, purchased 1.08 tons of gold from domestic mines in the first two months of this year after buying just 2 tons in all of 2009, said Khan, one of five directors at the country's monetary authority.

"We're going to increase our gold reserves and buy more local production," Khan said today. "Our objective is to increase reserves and help develop the local gold industry."

Venezuela's central bank is planning to provide $250 million of financing for gold production this year in an attempt to boost non-oil exports. The bank, along with the Mining Ministry, plans to build a gold refinery, bank President Nelson Merentes told reporters March 3, without providing details.

Gold futures for April delivery rose $2.10, or 0.2 percent, to $1,135.20 an ounce on the Comex division of the New York Mercantile Exchange. The metal gained 1.5 percent this week.

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