There is also the possibility that Russia holds more than 2299 tonnes of gold, as additional gold may be being held in both the Russian State Fund of Precious Metals and Precious Stones, operated by The Gokhran (see , and also through Russia’s Sovereign Wealth Fund. In an article on Sunday 27 February, the Financial Times speculates that due to Western sanctions against the Russian central bank, the Bank of Russia might sell gold:
The Bank of Russia appears not to have read the Financial Times, since, Russia just came out on 27 February and will do the opposite of what the FT suggested:
Across the UK, US, and European sanctions, the common theme is freezing of bank assets, blocking the access of Russian banks and Russian companies to Western capital markets, sanctioning Russian government owned companies, banning various Russian banks from the SWIFT system, and attempting restrictive measures against the deployment of Russia’s international reserves. While the “restrictive measures against the deployment of Russia’s international reserves” is interesting and could indirectly cover the ‘deployment’ of gold, given that all of Russia’s gold reserves held in Russian vaults, what exactly would ‘deploying’ mean when applied to the Russian gold?
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When Turkish finance minister Nureddin Nebati this week announced plans to encourage households to convert their gold holdings into Turkish liras in a bid to shore up Turkish central bank reserves, he was targeting people like Esra G. Ms. G., whose last name has been abbreviated to preserve her anonymity, has had a life-long troubled relationship with gold. When she was barely three years old, her distaste for it as an adornment was already so strong that she dumped all her gold rings, bracelets, necklaces, and earrings into the Bosporus.
Nonetheless, Ms. G. grew up to be an avid collector of gold, including an assortment of five- and 10-gram Credit Suisse coins. As a young woman, Ms. G. preferred antique silver jewelry and wouldn’t wear gold but kept her gold collection under her pillow. Ominous developments in Canada, where the Canadian government under prime minister Justin Trudeau has now invoked a never before used Emergencies Act (written in 1988) under the pretext of a crisis, so as to try to smash ongoing protests directed at that very same government.
The Emergency Act was designed to cover four types of emergencies, public welfare emergencies, public order emergencies, international emergencies and war emergencies, none of which currently exist in Canada. However, powers under the Emergencies Act allow Trudeau’s government to ban travel, force movement of people, prevent movement of people, and force private companies to do what the government directs. Not surprisingly, the Canadian Civil Liberties Association has come out saying that the invocation of this Emergencies Act is a “threat” to Canada’s democracy and civil liberties. Most shockingly, an Order under the Emergencies Act, revealed by Canada’s deputy prime minister Chrystia Freeland, now allows Canadian banks and financial institutions to freeze both personal and corporate bank accounts in Canada. As of Monday 14 February, Canadian banks and other financial service providers are able “to immediately freeze or suspend an account without a court order”, and will be free of liability in doing so. The Order also allows the Canadian government to share information with private banks about bank account holders. The powers also allow the Canadian government to monitor crypto transactions of Canadians. So if you are in Canada, and thought that your bank account deposits and savings were safe and private, think again, as your bank accounts and your savings are now subject to being frozen or suspended. Can it happen to your country? While it is always important to keep some of your assets outside the banking system, ring-fenced from financial repression, banking sector bail-ins and negative interest rates, those in Canada now have another reason – to stop your funds from being literally frozen. This is also a taste of what central bank digital currencies (CBDCs) will look like in the not too distant future, where governments can switch off access to account based CBDCs if citizens are ‘not playing ball'. Saving and investing in physical precious metals allows you to have full ownership of gold and silver bars and coins that if you store at home or store with a non-bank third party vaulting provider, are completely outside the banking system and safe from government and central bank interference. If you think this is a Canadian problem, think again, as both Trudeau and Freeland are very much involved with the elite operated World Economic Forum (WEF) which is angling for a ‘Great Reset’ and a world of surveillance and control. Trudeau is a WEF Young Global Leader and frequent WEF speaker, and Freeland is even one of the board of trustees of the WEF. If protests about civil liberties in Canada can lead to these tyrannical powers being introduced, this can also happen elsewhere, as to quote the WEF’s Klaus Schwab "we penetrate the cabinets” of governments around the world. Be aware, as maybe in your country, the Covid restrictions will be eased soon, there will be more threats on the horizon. Another pandemic, internet hacking or the financial system collapse can or will be the next step. Be prepared and take good care of yourself. In the ongoing tug of war between the gold trading centres of, on the one hand, the United Arab Emirates (UAE), and on the other, the axis of London-Switzerland, the UAE has now thrown down the gauntlet with the launch of a UAE Good Delivery Standard for gold, a system which will go into effect beginning in February. This UAE Good Delivery Standard will be pretty much like the LBMA Good Delivery Standard for gold, and will govern which gold bars from which refiners will be acceptable for settlement and trading in the UAE market. Readers of The Peet Journal blogs will be familiar with the fact that UAE-Dubai and London-Switzerland have not been on the best of terms for quite some time, and that the Dubai / UAE gold industry, in the form of such personalities as Ahmed Sultan Bin Sulayem, executive chairman of the Dubai Multi Commodities Centre (DMCC), have not been afraid to push back against LBMA – Swiss interference.
“In Delusional Push, LBMA Threatens to Blacklist Entire Gold Trading Centres” (24 November 2020), “In Ongoing Saga, Dubai Stands its Ground with the LBMA" (18 June 2021), and “Swiss pressure against UAE gold imports causes sharp rebuttal” from Dubai (27 October 2021). This latest launch of a UAE Good Delivery (UAEGD) Standard for gold must therefore be seen in the context of developments which have been ongoing for quite some time, a context which while frequently cloaked in front men such as NGOs and the OCED, and a complicit MSM spin about illicit gold mining / gold smuggling, is, at the end of the day all about UAE commercial and sovereign independence vs LBMA bullion bank cartel control. Note that the United Arab Emirates (UAE) consists of 7 Emirates, namely Abu Dhabi, Dubai, Sharjah, Ajman, Ras Al Khaimah, Fujairah and Umm Al Quwain. Abu Dhabi is the administrative capital, Dubai is the most populous emirate. The total population of the UAE is 10 million. The Dubai Precious Metals Conference (DPMC)While discussion of a UAE Good Delivery standard for gold (which is much like the LBMA Good Delivery standard for acceptable gold bars) first emerged at a meeting of the UAE’s Ministerial Development Council in Abu Dhabi on 6 December 2020, the actual launch of the UAEGD was announced on 18 November at the 2021 Dubai Precious Metals Conference (DPMC), after details were finalized at a meeting of the UAE Bullion Market in Abu Dhabi Committee on 9 October. UAE Good Delivery Standard launch Ten days later on 28 November in Abu Dhabi, the UAE Bullion Market Committee conducted the ‘official’ launch of the UAE Good Delivery standard, which they also call the “Emirates Standard for Good Delivery” for refiners and smelters. This launch was officiated by Thani Al Zeyoudi (which is also chairman of the UAE Bullion Market Committee), and UAE Minister of Economy, Abdullah bin Touq Al Marri. Standard, 28 November 2021, Abu Dhabi Based on coverage of this launch (from a statement by the UAE Ministry of Economy), what do we know about this new standard for gold? In summary:
Gold is a commodity that has historically been viewed as a good hedge against inflation, which is why the precious metal’s price performance over the last year has been a bit puzzling. The SPDR Gold Shares ETF (NYSEARCA:GLD), which is intended to reflect the performance of the price of gold bullion, is down over 8% year-to-date and has been a major underperformer. Meanwhile, inflationary pressures have persisted throughout the year and interest rates have been held at historic lows, which in theory should have led to a strong year for gold investors.
While this commodity certainly hasn’t been the strongest performer as of late, there are still plenty of narratives that support the possibility of a gold rally in 2022. If we continue seeing alarming signs of inflation and if nominal yields are held lower, stocks that offer exposure to the safe-haven commodity could have room to run. That’s why it’s a good idea to get familiar with some of the best gold stocks in the market as we head into the new year. 1. Newmont Corporation (NYSE:NEM) Gold mining stocks offer an interesting way to gain exposure to the commodity, as they typically will rise and fall with the price of gold, yet can also remain profitable companies even if the price of gold is declining. Newmont Corporation is certainly one of the best options to consider if you are interested in gold miners, as it’s the world’s largest gold producer and a company with a rock-solid balance sheet. It’s also a stock that offers exposure to copper, which is another commodity that has been a strong performer in 2021 and could continue benefitting from high demand as the global economy recovers. Newmont has assets and operations in North America, South America, Australia/New Zealand, and Africa, and generates the majority of its revenue from gold from those locations. It’s the type of investment that market participants love to buy when there is volatility and uncertainty at play in the market, which means it’s a great pick if you think next year could be a bumpy ride for the economy. It’s also a stock that offers a very attractive dividend yield of 3.75%, which is certainly appealing given inflation concerns. This could be one of the first stocks to rally should gold prices head higher in the coming months, which absolutely makes it worth watching as we begin the new year. 2. Royal Gold Inc (NASDAQ:RGLD) Another way to add exposure to gold via equities is with gold streaming and royalty companies like Royal Gold. These are businesses that pay fees to mining companies in exchange for either a percentage of the mine’s revenue or the ability to purchase precious metals in the future at a fixed price. This is an attractive model because it allows Royal Gold to potentially take advantage of gains in the precious metals sector without a lot of the costs and risks that are associated with mining operations. The company has a diverse portfolio with revenue from 44 producing properties, and over $1.1 billion of liquidity provides plenty of room for Royal Gold to seek out new deals. The stock is also worth a look thanks to its long history of dividend growth, as Royal Gold announced its 21st consecutive annual dividend increase back in November. After a 17% dividend increase, the stock is certainly one of the more attractive gold stocks to consider for 2022. Finally, it’s worth noting that many of the company’s operating counterparties have dealt with issues related to COVID-19 that stunted mining production, which means a rebound is likely on the cards next year. 3. Franco-Nevada Corp (NYSE:FNV) Finally, we have another gold-focused royalty and streaming company called Franco-Nevada Corp. The company claims to have the most diverse royalty and streaming portfolio by asset, operator, and country, which includes 324 mining assets and 82 energy assets. It’s also worth mentioning Franco-Nevada’s balance sheet strength, as it's one of the only companies in the mining industry without any debt. The strong balance sheet and efficient business model has allowed the company to reward long-term shareholders with annual dividend increases for 14 consecutive years, which is certainly another positive to consider. In Q3, Franco-Nevada Corp reported revenue growth of 13% to $316.3 million and Adjusted EBITDA growth of 15% to $269.8 million. The company is on its way towards delivering a record-breaking 2021, although the share price is well off highs at this time. It’s certainly one of the best gold stocks to watch in 2022, so keep an eye on how it performs in the coming weeks. For the world’s financial markets which have become literally dependent on the pronouncements of central banks, this week is lining up to be one of the most important in a long time. Because this week no less than 4 of the world’s most powerful central banks are each meeting to discuss quantitative easing (debt buying by central banks) and interest rate decisions, and to then ‘inform’ financial markets to what extent they will be kept on life-support stimulus.
First up is the operator of the world’s most influential fiat currency, the US Federal Reserve, whose Federal Open Market Committee (FOMC) meets over two days between Tuesday 14 and Wednesday 15 December, and then tells markets whether it will taper (decelerate it’s interventions) while engaging in Management of Perception Economics (MOPE) about future interest rate hikes (hint: they can’t raise rates). Following this, the Governing Council of the European Central Bank (ECB) meets on Thursday 16 December, and will also then pronounce about if and when it will scale back it’s trillions of interventional asset purchases, the leading two of which the ECB calls an ‘Asset Purchase Programme (APP)’ and a ‘Pandemic Emergency Purchase Programme (PEEP). Also expect ECB jawboning about interest rate increases but no rate move. On the same day, Thursday 16 December, the Bank of England’s Monetary Policy Committee (MPC) meets to also discuss interest rate increases. But the MPC will most likely use the convenient Omicron propaganda (rampant across mainstream UK media) as an excuse to leave UK interest rates unchanged. The same day on Thursday 16 December, the perennial interventionalist Bank of Japan (BoJ) begins a 2-day Monetary Policy Meeting (MPM), and in the same vein will chit-chat about decelerating asset purchases and raising interest rates, but in the end, as usual, the BoJ will do nothing. If you think about it, it’s ludicrous that the world’s so called ‘free market’ financial markets are hanging on the every word of a private banking cartel (the US Federal Reserve) for a signal about whether this same US Fed will scale back (taper) it’s massive interventions (asset purchases) into these so-called ‘free markets’. The same is true of the Fed’s colleagues at the ECB, Bank of England and BoJ. This is literally like a bunch of drug addicts (the markets) waiting to see if a drug cartel has enough drugs to sell to them all, or will the cartel dealers need to ‘taper’ the supply. The question that the mainstream financial media should be asking (but never asks), is why central banks need to intervene in bond and equity markets at all. The answer of course is clear, that without central bank interventions, the entire debt based financial system would implode. Each of these central bank decision making bodies also knows that they are now in unchartered territory and that they have painted themselves into corners with unprecedented asset purchases and historically low interest rates which they cannot reverse without imploding the system, as all the while inflation continues to accelerate across the board. So expect a lot of jawboning from the Fed, ECB, BoE and BoJ, as well as a lot of MOPE. But don't expect anything concrete or any change in direction from these central banks. For in the words of Max Keiser, “You can’t taper a Ponzi”. Recently the Central Bank of Ireland joined the ranks of sovereign gold buyers, adding 2 tonnes of gold to its monetary gold reserves in 2 months, consisting of a tonne of gold bought in each of September and October 2021. While in relative terms, the actual quantity of gold added by the Irish central bank was quite small, in percentage terms it was very substantial, since in August Ireland only held 6 tonnes of gold (supposedly held at the Bank of England), and as of the end of October Ireland now holds 8 tonnes of gold, i.e. a 33% increase (and a significant number for those in the know). These latest monetary gold purchases by Ireland’s central bank are also notable because it’s not often that a central bank that is:
What sparked the Central Bank of Ireland to add to its monetary gold reserves is unclear, because like all Euro puppet central banks and BIS lackeys, the Irish central bank thinks that it does not need to be democratically accountable when it comes to monetary gold. On a Need to Know Basis – And you don’t need to know! When asked by Bloomberg’s reporter last week as to why the Bank had bought 2 tonnes of gold, a Central Bank of Ireland official replied that the Irish central bank’s gold transactions “are commercially sensitive and no further comment can be made at this time”. But why would an EU vassal central bank feel the need to say that buying a modicum of physical gold was ‘commercially sensitive’? Probably it’s what they’ve been told to say by the ECB or BIS, but beyond this maybe it’s because they want to the buy the ultimate monetary asset, gold, while hoping that no one will notice. But why would an EU vassal central bank feel the need to say that buying a modicum of physical gold was ‘commercially sensitive’? Probably it’s what they’ve been told to say by the ECB or BIS, but beyond this maybe it’s because they want to the buy the ultimate monetary asset, gold, while hoping that no one will notice. Ireland’s Gold Purchase Data Looking quickly at the data behind the latest gold buying by the Irish central bank, what can we see? Before the gold buying in September and October 2021, Ireland claimed to hold 193,693 fine troy ounces of gold. As the latest Central Bank of Ireland annual report for m2020 - 2021 states, this consist of. “Gold and gold receivables [in the form of] coin stocks held in the Central Bank, together with gold bars held at the Bank of England.” In October 2021, the gold purchase of the Bank of Mongolia (BoM) was 3.2 tons, raising the BoM’s total precious metal purchase of 2021 to 18.1 tons. The figure shows a fall of 1.08 tons as compared with the same period of previous year.
In October, the BoM branches in Darkhan-Uul and Bayankhongor aimags bought 168.2 kg and 249.8 kg precious metals respectively. The average price of BoM’s purchase of 1 gram of gold was MNT 162,456.30 in October. Poland’s central bank, the National Bank of Poland (NBP), which stunned gold markets back in 2019 when it purchased 100 tonnes of gold bars in London and then promptly flew the gold back to Warsaw, has just confirmed that it now plans to buy another 100 tonnes of gold during 2022. The news was confirmed this week by Adam Glapiński, president of Poland’s central bank, in a 5 October special interview with Polish magazine ‘Strefa Biznesu’ in advance of the ‘Congress 590’ economic conference in Warsaw. As well as heading the Polish central bank, Glapiński is also an economics professor. While Poland currently holds 230 tonnes of monetary gold reserves and sits in 24 place in the planned addition of 100 tonnes of gold during 2022 would boost the country’s gold reserves to 330 tonnes and catapult Poland up to 18th place in the rankings, ahead of major gold holders such as the UK, Saudi Arabia, Austria, Spain and Thailand. 100 tonnes purchase in 2022 For those thinking ‘didn’t the Polish central bank earlier this year already mention buying 100 tonnes of gold?’, you would be correct. Back in March 2021, Adam Glapinski in an with Polish magazine Sieci said that Poland planned to buy 100 tonnes of gold over the coming years: “Over the course of a few years we want to buy at least another 100 tonnes of gold and keep it in Poland as well,” However, what has changed is that this gold buying timeline has now been compressed from a few years into 1 year, and the NBP will now execute the plan in 2022, with the NBP’s operating strategy being guided by the rule of thumb – as official reserve assets of the Polish central bank grow over time, it will continue to buy more and more gold using a target percentage of gold to total reserve assets. However, what has changed is that this gold buying timeline has now been compressed from a few years into 1 year, and the NBP will now execute the plan in 2022, with the NBP’s operating strategy being guided by the rule of thumb – as official reserve assets of the Polish central bank grow over time, it will continue to buy more and more gold using a target percentage of gold to total reserve assets. “Taking all this into account, in 2020 the NBP Management Board adopted a new reserve management strategy. The European Commission is considering a new registry to register all citizens' possessions. This should not only include properties in the form of real estate, land and shares, but also assets such as precious metals, cryptocurrencies, jewelry, works of art, cars and boats. This is evident from a new document entitled 'Feasibility Study for a European asset registry'. According to the European Commission, such a register is necessary to prevent tax evasion and money laundering. It provides the authorities with more information to map out money flows. From the text of the proposal: "Data collection and interconnection of registers is an important tool under EU law to speed up competent authorities' access to financial information and facilitate cross-border cooperation. Several possibilities researched to collect information with a view to establishing an asset register that can then be used for a future policy initiative. It will examine how to analyze information from different sources on asset ownership (e.g. land registers, company registers, trust and foundation registers, central securities depositories, etc.) and how the design, scope and challenges of such an asset register of the Union can look like. It will also be examined whether data on the ownership of other assets, such as cryptocurrencies, works of art, real estate and gold, can be included in the register." Financial repression Although this is only a proposal, this is a very worrying development. It gives governments even more insight into the wealth of citizens, on top of the information they already collect. It is striking that the proposal only focuses on the interests of governments, supervisors, banks and NGOs and does not take into account the interests of European citizens. The proposal also does not clarify why a more detailed registration of assets is necessary. Under the guise of money laundering and terrorism, such a register further affects the freedom and privacy of citizens. Governments use it as an excuse to exercise more control over their own population. The proposal is therefore strongly criticized from various quarters. According to the German politician Markus Ferber, the European Commission is passing its book. "These plans are completely disproportionate. The relationship between the citizen and the state reminds me of China, not EU member states, when these kinds of plans are made." Control State The German newspaper Die Welt concludes that with this register all assets of gold and bitcoins become traceable, while the Austrian newspaper Die Presse reminds of a chapter from Orwell 1984. According to the Austrian Kroner Zeitung, such a registration of assets is impracticable in practice. and also very expensive. According to the German magazine Focus, the EU wants to map the wealth of all people down to the last cent: "If this register were established, the consequences are obvious. For example, for politically unwelcome citizens - and not only criminals - it will be much more difficult in the future to continue their activities. investigative journalists or whistleblowers, who are threatened with more targeted reprisals. Controlling money flows, investments and assets is contrary to human dignity. Under the guise of preventing money laundering, we are all being vetted. Now is the time for civil disobedience. People have to take to the streets, like the yellow vests in France." Capability mapping is the next step in tightening control over citizens. Earlier, the European Commission advocated stricter supervision of cryptocurrencies. She wants to register all crypto addresses, so that anonymous transactions come to an end. The European Commission also issued a directive this summer to ban transactions over €10,000 in cash across the European Union. A worrying development, even for savers who have nothing to hide.
EDITORIAL: Germany shows the World why investing in Physical Precious metals is so Important.27/8/2021 Recent World Gold Council data on investment gold demand shows that the German market had the world’s highest gold coin and bar demand in H1 2021, even ahead of China. (Check @ https://twitter.com/KrishanGopaul/status/1430973575989768198?s=20). Demand for gold coins and gold bars in Germany increased by 35% during H1 2021 vs H2 2020, compared with a 20% increase in the rest of the world. (Check @ https://www.bnnbloomberg.ca/inflation-wary-germans-are-loading-up-on-gold-1.1644487).
Germany is Europe’s largest gold market and has a very sophisticated investment gold distribution structure through many banks and gold dealer outlets through the country. A survey in 2019 on gold investments conducted on behalf of the German Reisebank found that Germany’s citizens owned a massive 8918 tonnes of gold, of which 4925 tonnes (55% of the total) was held in the form of physical gold bars and gold coins, with the remaining 3993 tonnes held in the form of gold jewellery. The savvy German public also continues to buy physical gold in huge quantity even though the German government has thrown up obstacles to make the anonymous purchase of physical gold more burdensome. The news that Germans are still stacking up on physical gold should not be surprising given that the country has an historical appreciation of the dangers of Weimar hyperinflation and fiat currency debasement. Maybe we should all take a leaf out of the Germans’ book when it comes to gold, as inflation around the world accelerates and the monetary printing presses continue to whirl unabetted.
Among central banks of the world, the DAB has always been one of the more transparent when it comes to divulging information about it’s gold reserve holdings, and looking at the DAB’s annual financial statements, you can see why. In the latest annual financial statements of the DAB for the year ended 30 Qaws of solar year 1399 (which is 20 December 2020), note 7.1 to the financial statements states that the DAB holds:
“703,004.944 fine troy ounces of gold in bar from held at the Federal Reserve Bank (FRB), New York as the Bank’s international reserve.” This 703,004.944 ozs is approximately 21.87 tonnes of gold On Sunday evening 8 August at 6:00pm New York time, as the trading of gold futures contracts commenced for the week and the COMEX GCZ1 December 100 oz gold futures contract</a> opened at $1765 per ounce, there was nothing in the market or in wider macro news to suggest that the gold price was about to witness a sudden drop of $87 or 5% to a low of $1677.9, or that 90% of that drop would be in a 12 minute period between 6:45 pm and 6:57 pm when the gold price fell by 4.93% on huge contract trading volume. From a macro perspective, nothing had changed over the weekend, and all news that could arguably have affected the gold price, such as market unease about the US Fed moving to taper QE and asset purchases, was already reflected in the price. Waterfall drop in COMEX gold futures, Sunday evening New York time, August 8
On the previous Friday, August 5, the gold price on COMEX had wrapped up the afternoon at $1763.5 after meandering tightly in the $1760 – $1765 range for the previous 7 hours. Earlier on Friday morning had seen ‘higher than expected’ US non-farm payroll data for July, with the narrative wheeled out to those naïve enough to believe it that this could trigger ‘early’ Fed tapering and higher interest rates. Spoiler – The Fed can’t taper. Despite this fact, the US jobs data was put into the trading desk mix as the US dollar rallied and US bond yields spiked higher, and the COMEX gold price fell sharply Friday morning from $1801.8 at 8:30 am, to $1764.6 by 10:00 am. Before looking at the Sunday evening orchestrated plunge, the key point to remember is that the Friday morning data and how it was digested, was already embodied and reflected in the gold price by 10am on 5 August, and there was no volatile price action in the COMEX gold price over the next 7 hours up to 5pm Friday afternoon New York time (when trading halts for the weekend). Thinly Traded – Timing the Attack As everyone knows, Sunday evening opening hours in COMEX trading New York time (corresponding to Monday morning Asian hours), is a time of thin trading and illiquid markets relative to the Monday to Friday New York mornings when the ‘main event’ of precious metals trading takes place. Additionally, it is currently August, and due to holidays and vacations, far less market participants than normal are at their desks, and furthermore, two of Asia’s main gold trading hubs were on holiday. Singapore had a national holiday on 9 August for Independence Day. Japan had a national holiday on 9 August observing Mountain Day. So would Sunday evening 8 August New York time be a good time to sell thousands and thousands of front month gold futures contracts over a few minute period if the sellers were rational profit maximizing traders. Of course it would not. Which is precisely why said sellers of thousands and thousands of December 2021 gold futures contracts decided to execute their trades on an August Sunday evening (Monday morning Asia time) during thinly traded hours when New York and London were closed, and where two of Asia’s largest financial centres, Singapore and Tokyo, were on holiday. Because the sellers of these gold futures contracts had only one motive, and that was to bomb the gold futures price and trigger stops and further selling by other contract holders, simultaneously torpedoing the international spot price and achieving the desired effect of negative gold headlines around the world, but above all else attempting to disarm the gold price as the barometer of inflation expectations, and strangle the gold price as the ‘canary in the coal mine’. This year has been shaping up to be a strong one for central bank gold buying. This is despite the official absence from the buy side of central bank gold powerhouses such as Russia and China. Instead, there has been a noticeable trend of a diverse group of central banks who are not regular gold buyers, deciding to step up and make substantial gold purchases over short periods of time. Thailand, Hungary and Brazil First up in Europe was the central bank of Hungary, Magyar Nemzeti Bank (MNB), which stunned the gold market in early April, when it announced that it had bought 63 tonnes of monetary gold during March 2021. Next up in Asia was the central bank of Thailand, Bank of Thailand, which revealed that over the two months of April and May 2021, it had added a total of 90 tonnes of gold to its reserves, specifically 43.5 tonnes during April, and another 46.5 tonnes in May. And now most recently, the attention has moved to South America, where IMF data submitted by Brazil’s central bank, the Banco Central do Brasil (BCB), reveals that after adding 11.7 tonnes of gold in May, the Brazilian central bank bought another 41.7 tonnes of gold in June, making a 2-month buying total of 53.5 tonnes of monetary gold. This now boosts Brazil’s gold reserves to a claimed 121 tonnes and puts South America’s largest economy in 32nd position in the sovereign monetary gold holding rankings. These three sets of gold buying from Thailand, Hungary and Brazil now make this trio the top 3 central bank gold buyers so far in 2021. In the case of Thailand, 2021 was the first time since 2011 that the Bank of Thailand had made a substantial purchase of gold. In the case of Hungary, the 2021 purchase was only the second time it had entered the market for many years (the other time being Hungary’s large gold purchase of 28.4 tonnes in October 2018). In the case of Brazil, 2021 was the first time since 2012 that the Banco Central do Brasil (BCB) had gone out and purchased gold, and at 53.5 tonnes, was BCB’s largest gold purchase since the year 2000.
Brazil’s Gold Reserves – No Transparency And then it suddenly struck me. No one seems to know very much at all about Brazil’s sovereign gold reserves. Look on the main pages of the BCB website about Brazil’s gold reserves, and you will find nothing. For a top 3 purchaser of gold during year-to-date 2021, this seems very odd. For example, where are these gold reserves held and stored, and in what form? More importantly, where did the Banco Central do Brasil buy the gold that it claims to have bought so recently during May and June, and who was the seller? What were the BCB’s gold buying motivations in adding 53.5 tonnes? And critically, does Brazil lend out its gold and only hold ‘claims on gold’, or does it hold only allocated and unencumbered gold bars in set-aside accounts with foreign central banks? So I decided to put my questions to the BCB directly, whose headquarters are in Brazil’s federal capital in Brasilia. And this is where it gets interesting. For while Hungary’s central bank was very forthcoming in explaining why it purchased 63 tonnes of gold during March (and even published a press release and photos of the gold bars purchased), the same cannot be said of the Banco Central do Brasil. |
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