Venezuela Nears Deal to Move $4 Billion in Gold From London to New York

According to four people familiar with the matter cited by the Financial Times on July 18, under the terms of the deal being discussed, the interim government led by interim President Delcy Rodríguez would gain legal control of the gold worth about $4 billion, but would not be allowed to sell it immediately. Three of the people said the gold could be used as collateral for the government to borrow funds, part of which would be used for reconstruction after the devastating double earthquake in June this year.

If finalized, the deal would be one of the first concrete results of the U.S.-backed negotiation process between the Venezuelan government and the opposition, and another important milestone in Venezuela's reintegration into the international community. After the news was announced, this development had a direct impact on market expectations for Venezuelan sovereign debt and related assets.

Seven-Year Dispute: Gold Ownership Unresolved

The dispute over the gold dates back to 2019. At that time, the United States, the United Kingdom, and some other countries recognized opposition politician Juan Guaidó—then Speaker of the National Assembly—as Venezuela's legitimate president, and the opposition subsequently claimed control over the gold bars stored in the Bank of England's vaults, with the dispute rising to the level of the UK Supreme Court.

A Bank of England spokesperson said that until the UK courts make a further ruling on the legal ownership of the gold, "the Bank of England cannot act on any instruction," and the relevant parties need to apply to the UK courts to resolve the dispute.

The government and the opposition announced last month that they are working together to unlock the 31 tons of gold stored in the Bank of England's vaults. The UK Foreign Office declined to comment.

Opposition Insists on Oversight Conditions, Gold Use Restricted

Although the two sides' positions are converging, the opposition explicitly demands strict constraints on the use of the gold. The opposition has long accused the current government of decades of rampant corruption and economic mismanagement, and insists on establishing control mechanisms to prevent the reserves from being misused.

"The gold will be transferred to the United States, but Delcy Rodríguez will not have direct access to it," said an opposition figure involved in the negotiations. "It will be subject to oversight and restrictions."

According to people familiar with the matter, the technical details of the agreement are still being worked out, and the negotiations have not yet been finalized. Currently, a group of opposition politicians traveled to Caracas this week to hold talks with a government delegation led by current Speaker of the National Assembly Jorge Rodríguez.

Venezuela's Reintegration into the International Community Accelerates

The gold deal negotiations are part of the broader context of Venezuela's diplomatic and economic reintegration into the international system. In January this year, the United States arrested then-President Nicolás Maduro in a surprise operation, and subsequently gradually eased some sanctions on Venezuela's economy; in April, the International Monetary Fund (IMF) resumed formal engagement with Venezuela after a seven-year interruption, allowing the Caracas government to regain access to funds held at the institution.

Meanwhile, the UK and Venezuela announced this week an upgrade of bilateral diplomatic relations, with the UK restoring an ambassador to Caracas and welcoming the negotiation process for new elections. Jorge Rodríguez traveled to London earlier this week for talks with the UK government, and after meeting at the Foreign, Commonwealth and Development Office, said on social media that there would be "good news" for the Venezuelan people.

The U.S.-backed negotiation framework aims to create conditions for new elections in Venezuela. In the last election in 2024, Maduro declared himself the winner, but the opposition's independently verified vote count showed he lost by a wide margin.

Interim Government Faces Economic Pressure, Urgently Needs Funding

For the interim government led by Delcy Rodríguez, access to gold-backed financing has urgent practical significance. Before the double earthquake in June this year, Venezuela's economic recovery was already slower than expected; the massive destruction caused by the earthquake further intensified the pressure for reconstruction funds.

If borrowing against the gold becomes a reality, it would provide liquidity support to the government without crossing the red line of selling reserves. Analysts believe that this arrangement addresses both the government's financing needs and the opposition's concerns about asset security, and is a compromise that both sides may accept under the current political framework.