The socialist leader said he would carry out the  nationalization through a decree to be issued in the coming  days and called on the military to help control the sector.

 "I have here the laws allowing the state to exploit gold  and all related activities. That is to say, we're going to  nationalize the gold and we're going to convert it, among other  things, into international reserves because gold continues to  increase in value," he said in a call to state television.

 The announcement comes a day after an opposition legislator  revealed a report showing the government's top finance  officials were recommending the repatriation of 90 percent of  Venezuela's gold reserves held abroad.

 "We've managed to increase the international reserves. We  have close to 12 or 13 billion of dollars in gold reserves. We  can't allow it to continue to be taken away," Chavez said.

 Venezuela has some of Latin America's largest gold deposits  in its south. According to official figures, formal mining in  the country produces 4.3 tonnes a year.

 Chavez, who has already nationalized large swaths of the  economy, agreed last year to let gold miners export up to 50  percent of production, from 30 percent previously. The other 50  percent must be sold to the central bank. [ID:nN12113998]

 Foreign companies have complained that the export limits  curb their ability to secure financing abroad, as well as  develop projects in Venezuela and generate jobs.   (Reporting by  Louise Egan; Editing by  Daniel Wallis)