Venezuelan Sanctions and the Tale of December Woes for Gold

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International Gold news on Monday, 3rd December was full of impactful statements coming in from Venezuela. Turkish President Tayyip Erdogan also visited the country and blasted the sanctions that were imposed on the country by American officials recently. Speaking in Caracas, the state capital, Erdogan criticized the sanctions and called them regressive.

President of Venezuela Nicolas Madura was also disturbed by the sanctions and said that the country held the right to export gold wherever it wanted. This came after the sanctions imposed by the United States had targeted the shipment of metals from the country.

Washington imposed sanctions on Venezuela last month, after President Donald Trump talked about banning individuals or entities that were to be involved with importing gold from corrupt and deceptive people present in the South American country.

Political problems cannot be resolved by punishing an entire nation,” said Erdogan, as he stood with Maduro by his side at a recent forum attended by business people from both countries. “We do not approve of these measures that ignore the rules of global trade.”

Venezuela is currently suffering a rapid bout of recession and hyperinflation. The country is facing a fifth year of recession, which has led to shortages in medicine and basic food equipment. Maduro hasn’t shied away from holding these regressive economic restrictions from the United States responsible for the poor state of affairs the country is in currently. However, critics suggest that that the current economic crisis is a doing of the socialist strategies implemented by Hugo Chavez, Maduro’s predecessor.

It is very petty to try to use an illegal sanction to prevent Venezuela from selling its gold to the world,” Maduro mentioned while speaking at a joint press conference with Turkish president Erdogan.

Can Gold Beat Its December Curse?

A commodity analyst with a keen eye on the market is hoping that gold prices in the global market can beat their December woes, as metal started the month on a strong note. Gold has traded below the critical resistance level of $1,240 for a significant period of time now.

The month of December, for the last three years, has been a period of time where gold has hit yearly lows. While it would take a lot to reverse these trends, Andrew Hecht, the creator of this commodity report, mentioned that December of 2018 might just prove to be different.

Gold has had every reason to move to the downside over the past few weeks, but it remains at the $1225 level,” he said. “The sign of strength in an environment that should be causing weakness is a good sign for the price path of the yellow metal.”

The Fed has done an excellent job preparing the market for rate hikes, and the next hike that will take the short-term rate to 2.25-2.50% is likely baked into all markets,” said Hecht. “Therefore, the devil will be in the details when it comes to the December 2018 meeting of the FOMC as their plans for 2019 and beyond will drive the value of the dollar, gold, and markets across all asset classes.”