Venezuela's Central Bank May Purchase Gold for Coins (Update1)

By Claudia Carpenter

Sept. 17 (Bloomberg) -- Venezuela's central bank may buy 15 metric tons of gold a year to develop gold investment products including coins, said Eli Sanchez, head of the gold department at Venezuela's central bank.

``Part of our function is to increase participation in the gold market,'' Sanchez said in an interview in London today. ``The point is in Venezuela you don't have the opportunity to invest in gold at this moment.''

The coins would be similar to Krugerrands in South Africa and Eagle coins in the U.S., he said, adding that Venezuela also has about 10 tons of the metal that may be used.

Gold is a ``very important part'' of Venezuela's monetary reserves and there are no plans to sell the metal, Sanchez said. ``Gold is very correlated to the price of oil.'' Venezuela holds 356 tons of gold, or about 30 percent of reserves, he said.

European central banks may sell 365 tons of gold in the year through Sept. 26, the least since they agreed to limit their annual sales in 1999, the World Gold Council said yesterday.

To contact the reporter on this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net.

Last Updated: September 17, 2008 07:33 EDT