Central Bank Gold movements

Posted | 24/11/2014 / Views | 3258
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There are some interesting things going on at present with central banks and their gold.  As the World Gold Council reported a fortnight ago in its Q3 update, central banks were substantial buyers at 93 t for the quarter and 335t year to date, and as we reported Friday, Russia was a big chunk of that.   Conversely Ukraine reportedly sold nearly 90% of its gold to the US quite quickly this year taking its 48t representing 8% of its reserves down to just 1% (speculation is rife about what ‘deal’ was done re US support).  And now last week we learn that the Dutch central bank secretly repatriated 120 t from New York back to Amsterdam “to ensure a better spread” and in hopes to boost consumer confidence by showing there is enough gold in the Netherlands to take the country through a new economic crisis. The Netherlands has 612 tonnes of gold – worth €19bn at current gold prices and representing 51% of reserves.  The Germans will no doubt be curious about how the Dutch could achieve in one hit what the US Government said would take 7 years when Germany asked for its gold back last year… What is clear is that central banks have been strong net buyers since the GFC (when the penny dropped?) and the positioning keeps happening.  The elephants in the room are the Swiss gold referendum next week and just how much the People’s Bank of China has accumulated since they last told the world of their relatively measly 1054t in 2009.  With their import numbers over the last few years bets are it is very big and a market mover when revealed.  In the meantime they keep secretly accumulating at nice low prices…