Central Banks Purchase 127 Tons Of Gold In Q1

Tyler Durden's picture

Most have heard by now that Mexico disclosed that back in Q1 it bought 93.1 tonnes of gold, increasing its total gold holdings from 7.1 tons to a whopping 100.2 total tons, a stunning move which was disclosed to have been done "in line with prudent diversification principles of reserves management." However, what is less known is that many other central banks, chief among them Russia and Thailand were also waving the shiny yellow metal in between January and March. And just as importantly, from the World Gold Council, from where this update comes: "The latest statistics show no significant selling by the signatory central banks in Year 2 of the third Central Bank Gold Agreement (CBGA3)." So no central banks sell, yet the daytrading retail public knows better. As for the key question of whether China is adding to its meager holdings of 1,054 tons, which put it behind the GLD, not to mention France and Italy, there is no update. Recall, however, that when China announced an addition of +454 tonnes of gold in April of 2009, this indicated stealthy purchases of the metal in the 2003-2009 period. In other words, China is very likely accumulating gold and the next update will likely come some time in 2015.

From the World Gold Council:

As of the IMF’s May release of its International Financial Statistics, several countries have reported additional purchases of gold. Notably, Mexico reported to the IMF that it acquired 14.8 and 78.5 tonnes of gold in February and March, respectively. This was a significant increase in its gold holdings, raising Mexico’s position in the table to the 34th largest holder of gold with 100.2 tonnes. In its press release, the Banco de Mexico indicated that its acquisition of gold was in line with prudent diversification principles of reserves management. Indeed, Banco de Mexico’s acquisition of gold was likely motivated by a need to diversify its rapidly expanding foreign reserves, which increased from approximately $75 billion to $120 billion between Q1 2007 and Q1 2011.

Additionally, Thailand also reported an increase in its gold reserves of 9.3 tonnes in March, raising its total gold holdings to 108.9 tonnes. This follows an acquisition of 15 tonnes in July of last year. Finally, Russia continues to regularly add gold to its reserves, adding 22.5 tonnes between January and March. Russia is the 8thlargest holder of gold.

Below, we show which central banks had activity (either purchasing or selling) in Q1. We added "selling" for objectivity purposes: there was net purchasing of 126.9 tonnes of gold in Q1.

And an updated holdings list by central banks as of May 2011:

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
lolmao500's picture

You liar! It's more like 40 tons of gold and 87 tons of tungsten!

NoLongerABagHolder's picture

I find it interesting that most on here will hammer on CB's - yet when the CB's buy gold - they think it shows they are in the right trade.

 

CB's are notoriously wrong when the sell and buy PM's. Why anyone would want to be on the same side of the trade as the CB's in gold stumps me.

LowProfile's picture

Ah, the sleeper wakes.  Waited a year and 33 weeks, eh?

If not, I hope you have a throwaway cell phone...  Because to be able to smoke enough for that logic to make sense, you must be a dealer.

Temporalist's picture

Actually he's right but since the CBs just started buying over the past 2 years they are waaaayyyy behind in the game.  They will need to buy for 8 more years and by then everyone will be selling.

Urban Redneck's picture

Wasn't Gordon Brown just trying to get a job running the IMF paper pimps a few weeks ago? Seems to me to be more indicative of a top in fiat.

You can generalize about central banks, but Gordon Brown is the reincarnation of Wrong Way Corrigan.

InconvenientCounterParty's picture

A CB buying gold is a CB hedging fiat. It's not a "trade".

P.S. look inside the bag before you give it away.

Hugh G Rection's picture

3.4 tonnes Canada?? Farging embarassing eh?

 

If you wanna be on board with a gold backed Amero, its aboot time to buy some more.

Anglo in Abitibi's picture

Sadly Paul Martin (the despicable traitor) pulled a Gordon Brown and sold off our gold holdings to "pay down the debt" when it was South of $300 USD/toz. So all we`re going to bring to the Amero is the world`s largest supply of fresh water.

billhilly's picture

Fresh Water, soon to be "as good as gold" !

Satan Rotchild's picture

...assuming successfully continued repression of desalinization technology...

Long-John-Silver's picture

The Gold plating on tungsten is very thin at about 15 mils per bar. I would say it more like 40 ounces of gold and not 40 tons.

Satan Rotchild's picture

So, how much of official gold reserves is salted?  1.5 million 400 oz. bars courtesy of Clinton/Rubin?  That would be a $900 billion swindle @ $1500/oz. (not adjusted for the actual gold plate)  Do the less savvy CBs hold most of it?  And what happened to the 16% of official gold reserves stored under WTC 1-2 in 2001?

Transformer's picture

Wow, I get it.  At the same time Gordon Brown was selling off England's gold, Canada and other british subjects sold off too.  And the gold in fort knox was salted.  I wonder who accumulated all this gold at this time?  Could it be the elites, with crumbs to their political lacky's?  Of course, the elites would accumulate as much gold as possible for the coming hyper inflation (a la FOFOA) and of course, they would do that at the lowest price ever.  And of course, the Queen could just order her subjects to sell, in America it would require stealth.

SheepDog-One's picture

The Golden Rule- 'He who has the gold, makes the rules'

'Bout to get central banksta medieval in this world real soon.

Mountainview's picture

Yeah, it's a nice economic leading indicator. The buyer feels strong !

Gene Parmesan's picture

I'd like to know just how much gold could be purchased with all the unbacked paper currency printed by the various central banks in Q1.

Tramp Stamper's picture

A little nugget, um i dont know, maybe about the size of the moon

DoChenRollingBearing's picture

@ SheepDog,

+ $1500 as usual.

I am interested in ZH comments on this observation I made on a now stale thread earlier:

One other observation: I have yet to see ANYONE who says that they will trade their GOLD for SILVER.  Silver for gold..., yes, but not the other way around.  So, which metal is being held by the strongest hands?  That would be gold.  My hands.  And the central banks.

AZSovreign's picture

Who is selling all this Gold? who did Mexico buy from?

Vincent Vega's picture

JP the Morgue of course. Who, for a nominal fee, has also agreed to store it for them. 

johny2's picture

That is because most of us believe that present exchange ratio is going to fall down to the ratio between the physical reserves. 

billhilly's picture

Bearing,

Seems like you have been awful negative on Silver in your recent comments.  What gives?  Don't tell me you've turned MOMO !

DoChenRollingBearing's picture

Naah!  Not negative on silver.  I just like gold better.

Physical silver will outperform most other invesments, IMHO.  Sure is better than ALMOST anything.  Silver will also be spendable in a SHTF...  Keep the gold for my kid (grandkid(s)?) in the future.

I am not selling much more of my silver.  Won't sell ANY unless the GSR comes down to 30 or so.  I still have a lot.

And Pt too.  Mmm, yummy platinum...

DoChenRollingBearing's picture

Further comments on gold, silver and trolls!

SILVER, perhaps because of fundamentals (use by industry &, relative scarcity) and BIG returns vs. gold, seems to be WAY more popular than gold here lately.

And, the trolls seem to have become very troll-y on silver.

Mountainview's picture

Why Platinum is almost forgotten?

akak's picture

Indeed.

Grey and ugly as it may be, I like it too!

DoChenRollingBearing's picture

Pt is not forgotten by me!

By value, it is my second biggest holding of PMs.

aphlaque_duck's picture

My concern is that much of the demand for Platinum and Palladium is for catalytic converters and industry. Yes that places some kind of floor on the price but you are still exposed to big losses if there's a sudden drop in demand.

tmosley's picture

Platinum is money.  Most people don't understand this because it has never seen use as currency, but that means nothing.

akak's picture

Actually, the Russian Empire issued circulating platinum coins for several decades in the middle 19th century, valued, ironically, at almost exactly the same ratio relative to gold that holds today.  They also simultaneously issued (or tried to) full-value copper coins.  With all the obvious and well-documented problems in many other nations in trying to hold to a bimetallic standard, I can only imagine the problems the Russians faced in attempting to maintain a tetrametallic standard!

tmosley's picture

Interesting.  I did not know that.

Yes, it is foolish to set exchange values.  All these metals should just float against each other.  One form of money would likely win the most use as currency.  

akak's picture

The Russian platinum coins were beautiful --- and must have been an absolute bitch to mint, given the technology of the day.  Their numismatic premiums, which are very high, have unfortunately prevented me from ever purchasing one, although I have seen several over the years.

papaclop's picture

Gold is realy good, but it is cheap historically in terms of silver.

papaclop's picture

I'm tempted to trade, because Gold is cheap relative to silver.

Arrowflinger's picture

Puny peso trumps the dominant dollar?

Unimaginable.

 

slewie the pi-rat's picture

coming soon:  peso carry trade

Cash_is_Trash's picture

With +80% of Mexico's export destined to the U.S. market, Mexico is disadvantaged receinving an ever slumping USD in return. In addition, to curb inflation growth in Mexico, higher interest rates with accumulated gold purchases will make the currency more valuabale allowing for greater imports from the U.S and other partners.

I think Mexico is one of the most vulnerable countries to Ben inlfation scheme, due to proximity and the resulting economic dependence.

I am glad the Central Bank of Mexico is voting on its future with sound monetary fundamentals; then again, I may well be wrong.

silberblick's picture

Everybody should do the same: BTFD. Watch this animation to get inspired to do so:

http://www.youtube.com/watch?v=vs7-yDO6i9Y

Then head over here to read why silver market mainpulation will not end anytime soon:

http://thesilvergoldhedge.blogspot.com/2011/05/market-manipulation-not-t...

Mercury's picture
Central Banks Purchase 127 Tons Of Gold In Q1

...and those purchases ain't on margin.

PMs up from here.

Josh Randall's picture

Should we be performing a 64 team tournament bracket breakdown of country vs. country once it hits 5k an ounce ?

amagi's picture

Quick!  Flee to safety!!!

Gubbmint Cheese's picture

I thought it was a barbarous relic?

No?

Agent P's picture

It will always be worth its weight in gold.  

slow_roast's picture

The Asians all need to buy more...when fiats all die, soonish, those with the most gold will win. 

SheepDog-One's picture

'USA 8,000 tons of gold' yea sure.

slewie the pi-rat's picture

our banksters are fabulous!  we must trust them. 

fade the NWO, BiCHeZ!

YouTube - Gold Price Song

Construct's picture

8000 Tons of gold paper certificates.