In May, Venezuela reportedly sold 15 tonnes of gold worth $570 million from its central bank reserves, skirting US Treasury sanctions. This brought the South American country’s gold reserves to a 29-year low; they are now worth $7.9 billion.

Deutsche Bank AG has confiscated 20 tonnes of gold owned by Venezuela and is using it as collateral after Caracas defaulted on a bilateral gold swap agreement worth $750 million, Bloomberg cited several unnamed sources as saying.

Venezuela received a cash loan from Deutsche Bank in line with the 2016 financing deal, which was due to expire in 2021.

The sources claimed that the bank had decided to close out the contract when Venezuela missed its enterprise payments earlier this year.

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This comes as a spokesman for Venezuelan opposition leader Juan Guaido reportedly signalled the opposition’s readiness to negotiate terms with Deutsche Bank which could allegedly let it deposit $120 million into an account outside the country’s President Nicolas Maduro’s reach.

Jose Ignacio Hernandez, Guaido’s US-based attorney general, also warned Deutsche Bank against negotiating with what he described as “the Venezuelan Central Bank’s illegitimate authorities”.

Spokespersons for Deutsche Bank and the Venezuelan Central Bank have yet to comment on the situation.

The Venezuelan Central Bank, meanwhile, reportedly sold 15 tonnes of gold worth $570 million from central bank reserves in May, in a move that helped Caracas bypass US Treasury sanctions but reduced the country’s gold reserves to a 29-year low of $7.9 billion.

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The US Treasury has imposed several rounds of sanctions on Venezuelan state companies since January, with total damages from these restrictive measures reportedly exceeding $100 billion.

In February, President Nicolas Maduro suggested that “more or less 80 tonnes” of Venezuela's gold could be frozen in the Bank of England.

This followed Bloomberg’s report that the Bank of England refused to withdraw Venezuela's gold reserves,worth $1.2 billion, at Maduro’s behest.

READ MORE: Caring "Ruler"? Guaido Calls on EU to Impose More Sanctions on Venezuela

In late January, Guaido declared himself Venezuela’s interim president in a move which was immediately supported by the US and its allies and which led to the escalation of a political standoff in the South American country. President Maduro accused Guaido of being a “puppet”, while blasting Washington for orchestrating a coup in Venezuela.

Russia, China, Cuba, Bolivia, Turkey and a number of other countries then signalled their support for Maduro as the only legitimate president of Venezuela.