Venezuela wants its gold back. Added: Gold Cartel scrambling.

Bank of England's gold vault.

Venezuela has title to about 400 tonnes of gold (12/2010) and Chavez wants all overseas gold brought home. (A more recent report from MoneyNews says Venezuela now holds 365 tonnes of which 211 is held abroad).   He wants 99 tonnes back from the Bank of England. Not unmanageable since the BOE reported holding 310 tonnes 12/2010.  If he asks for 10.6 tonnes back from J P Morgan (one of five vault banks) that amount roughly equals JPM's total holdings on hand.  That's problematic.  The vault banks have about 325 tonnes between them but most of it isn't on hand.  Source at Zero Hedge. A couple more countries doing the same would trigger a painful illiquid squeeze.

Chavez,
cancer survivor.

Why does he want it?  He protects it from sanctions that may come some day soon.  Some will be for  political spending ahead of 2012 elections, for redeposit with Brazil, China, India, Russia and South Africa and some for theft.  When Chavez jokes “If there isn’t enough room to store the gold in the central bank vaults I can lend you the basement of the Miraflores presidential palace.” - this is the voice of the mouse who would guard the cheese. It's part of an ongoing nationalization of the gold industry in Venezuela.  Source: Bloomberg and Money News (The latter story appears to use "tons" where "tonnes" is intended.)

The gold holdings of the five vault banks: CME Group
For comparison:  Holdings of central banks worldwide. (US Treasury has 8133 tonnes. One tonne equals about 35,000 ounces.)

Added:  Will Venezuela bring down the Gold Cartel?
We wondered if the unwind of the great gold cartel, whose purported price manipulation has always resided in the domain of paper, or confidence-based, precious metals, may have started from the most unexpected source: Venezuelan dictator Hugo Chavez who just announced that he will not only nationalize the country's gold industry but reclaim his physical gold (however much of it may exist) from custodians such as JP Morgan and Bank of Nova Scotia.

Added August 22nd:   Bank of England was notified by email!  Forty shipments by sea will transfer the 17,000 bars.
Added September 9th:  Chavez has seen how the West froze Ghadaffi's assets and wants to avoid the same.  He is also transferring other reserves to Russian and China banks, because they are increasingly funding him and would like some collateral.  The move may protect Venezuela from the multi-billion lawsuits underway over nationalization of Conoco Phillips, Exxon, Mobil and more. Stratfor article.