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Currency Wars - Russia Buys 20.7 Tonnes Of Gold In December; Netherlands Refutes IMF Gold Data

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Currency Wars - Russia Buys 20.7 Tonnes Of Gold In December; Netherlands Refutes IMF Gold Data

UPDATE: Since we published our blog this morning, the Dutch central bank has denied that it added to its gold reserves in December.

De Nederlandsche Bank, the Dutch central bank has denied reports in Reuters, Bloomberg and picked up by GoldCore, that the bank had increased its gold holdings for the first time in sixteen years. IMF data had shown that the Dutch had increased their holdings to 622.08 tonnes.

“De Nederlandsche Bank has not increased its gold holdings. Several media reported this Tuesday that based on IMF figures, DNB’s gold stock increased in December 2014. This is incorrect,” it said on its website.

The DNB’s correct and current gold holdings consist of 19.691 million troy ounces (612.5 tonnes), the tenth largest holder of the metal in the world, according to the World Gold Council’s January data.

We believe that it is only a matter of time before a European or other central bank begins to emulate China and Russia and starts accumulating gold. Today's error may portend tomorrow's reality. It is important to note that while Dutch central bank gold accumulation would have been a very significant development, Russia's steady and robust accumulation of gold is very important. It came at a time when some analysts were suggesting and there was much chatter that Russia would sell gold reserves.

 

GOLDCORE's BLOG THIS MORNING:
DUTCH AND RUSSIAN CENTRAL BANK BUY 30 TONNES OF GOLD IN DECEMBER

Russia and surprisingly the Netherlands were the largest central bank buyers in December - accumulating a significant 30.34 tonnes between them as currency wars intensify. 

Demand for gold as a diversification and monetary asset continues to be very robust and central banks remain net buyers of gold which should be supportive of prices.

goldcore_bloomberg_chart1_28-01-15

The Netherlands, which has the ninth-biggest gold reserves,  raised its bullion holdings for the first time in 16 years. It added  9.61 tonnes to bring total gold reserves to 622.08 tonnes.

Russia raised its gold reserves for a ninth straight month in December as the country continued its multi month gold buying spree, adding to the fifth-biggest gold holdings in the world, data from the IMF showed yesterday. 

Russia continues to dollar cost average into gold and increased its bullion holdings by another hefty 20.73 tonnes to 1,208.23 tonnes in December.

The December figure for Russia, who have the fifth largest reserves in the world, brings their officially stated reserves to 1208.23 tonnes. If this trend were to continue their officially stated reserves would increase 20.6% this year.

goldcore_bloomberg_chart2_27-01-15

Given that Russia perceives itself to be under financial and economic attack from the West, there is the possibility that they are accumulating more gold than they are declaring officially to the IMF.

This is what the People’s Bank of China (PBOC) has been doing in recent years and there is little reason why Russia may not adopt the Chinese practice of not being transparent in this regard.

The Chinese government have been surreptitiously accumulating vast quantities of the metal in recent years and there is no reason to believe this buying will end in the coming months as geopolitical and monetary risks intensify.

Western central banks seem to be balking at what will be seen as the disastrous policy of dumping the gold owned by their populations onto the market. The Gold Anti Trust Action Committee (GATA) have documented how this was done in order to suppress gold prices, in a bid to support and maintain faith in the dollar as reserve currency.

Already there are strong movements across Europe to have sovereign gold stored domestically. The German and Dutch central banks have recently reported the repatriation of large volumes of their gold being held by central banks of foreign nations.

It is worth bearing in mind that both these countries are on the record as having drawn up contingency plans in the event of the failure of the Euro.

The Netherlands added 9.61 tonnes to it's official holdings in December, on top of the 122 tonnes of gold they shipped home from New York in November. This represents the first increase in their official reserves since 1998. The Dutch central bank's holdings have been unchanged since late 2008.

This further undermines the notion that the gold repatriation was simply a "routine measure to instill public confidence in the ability of the central bank to manage crises."

It would appear the Dutch central bank has greater concerns than public confidence and may be actively preparing for the fall out from the ECB's QE programme - a programme to which they were opposed - and or a default by Greece, Spain, Portugal or Italy.

Among the many factors that may have motivated the Dutch central bank to buy gold may have been  a shot across the bows to the ECB to remind them that the Netherlands is equipped and prepared to revert to the guilder, should Mario Draghi in the ECB go too far in terms of QE and the debasement of the euro.

It may also signal that they are concerned as to whether they will be able to repatriate the rest of their gold reserves.

This is an important development as it is the first time to our knowledge that a western central bank has actually purchased gold in volume since before the launch of the Euro. While the central banks of China, Russia and ex Soviet states have been acquiring the precious metal hand over fist since the dress rehearsal crisis of 2008, western central banks gold reserves have remain unchanged - officially any way.

The gold repatriation movement represents a turning of the tide with regards to attitudes towards central bank omnipotence in managing paper currencies.

The Dutch purchase is noteworthy and it will be important to keep an eye on their demand in the coming months to see if this was a once off or the start of a trend of the Dutch central bank and other western central banks buying gold.

The announcement will likely spur other central banks to take precautions and acquire gold.

Richard Russell - the godfather of financial newsletter writers - has recently made a stunning assertion about the gold markets. The 91 year-old, who lived through the great depression and fought in World War II, is very gentle and humane in his writing. He is not given to bouts of sensationalism.

In his most recent Dow Theory Letters he suggests that physical gold may not be available to buy at anywhere near current prices within the next year.

"There is a giant secret stirring under today's market. China, India, Russia and almost every central bank is buying physical gold. I'm guessing that within another year, physical gold will be swept off the market.”

We have long contended that this would likely materialise given the scale of the current crisis and the very small size of the physical gold market globally.  The purchase of 30 metric tonnes of gold in one month is a lot of physical gold as there is only some 170,000 metric tonnes of above ground gold.
However, in dollar, pound or euro terms it is tiny. 30 metric tonnes of gold is only worth some $1.24 billion or less than one day of ECB QE and a tiny fraction of the value of stock and bond markets today and indeed of global foreign exchange reserves.

The smart money will continue to follow the Russian central bank example of gradually accumulating gold and dollar, euro or pound cost averaging into an allocated and segregated physical gold position.

Comprehensive Guide to Currency Wars: Bye Bye Petrodollar, Buy, Buy Gold

MARKET UPDATE

Today’s AM fix was USD 1,279.00, EUR 1,132.96 and GBP 848.48 per ounce.
Yesterday’s AM fix was USD 1,282.75, EUR 1,141.54 and GBP 854.60 per ounce.

Gold fell $13.30 or  1.03% to $1,280.40 per ounce yesterday and silver slid $0.41 or 2.24% to $17.89 per ounce.

Silver in US Dollars - 5 Years (Thomson Reuters)
Silver in US Dollars - 5 Years (Thomson Reuters)

Gold in Singapore for immediate delivery was nearly unchanged at $1,282.55 an ounce in the evening.

Singapore, premiums have dropped to 70 cents to $1 an ounce, compared with $1.20 earlier this month. In Hong Kong, premiums were at 50-70 cents an ounce, down from $1 two weeks ago.

In London, spot gold hit $1,281.46 an ounce in early morning trading. The gold price is down with profit taking following the Greek elections and ahead of the Fed meeting starting today.

European finance ministers are meeting to consider how to prevent a Greek default. It was communicated that they want to work with new leader Alexis Tsipras, as long as he relinquishes his demands for a debt writedown.

Further turmoil in markets, sluggish global growth, ECB QE and the risk of a new Eurozone debt crisis are all bullish for gold and silver’s outlook.

Gold bullion shipments from Hong Kong to China dropped 32 percent in 2014. Chinese imports from Hong Kong were 750 metric tons last year down from  1,108.8 tons in 2013, data from the Hong Kong Census and Statistics Department showed.

Hong Kong gold export data to China gets less relevant by the month and a better benchmark for Chinese demand is now SGE withdrawals which are running at a healthy clip - both in 2014 - and so far in 2015

Chinese demand remains very robust as seen in the more than 130 tonnes of SGE withdrawals in the first two weeks of the year.

The World Gold Council said in April that its long-term Chinese demand outlook remains intact as store of wealth demand is expected to expand to at least 1,350 tons by 2017 amid rising wealth. Mainland demand was a record 1,275.1 tons in 2013, the council said in November.

China’s central bank cut interest rates for the first time in two years in November and the government accelerated the approval of infrastructure projects to spur growth, fueling a 53 percent gain in the Shanghai Composite Index last year. Gold may benefit if investors pull back from the world’s best-performing stock market in 2014, according to UBS.

While the world’s second-largest economy expanded 7.4 percent last year, the slowest pace since 1990, the global flow of gold from West to East will probably last for as long as two decades, the China Gold Association (CGA)  said in June.

Silver for immediate delivery climbed 0.3 percent to $17.98 an ounce. Platinum was unchanged at $1,254.28 an ounce while palladium retreated 0.5 percent to $786.75 an ounce.

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Wed, 01/28/2015 - 04:13 | 5714873 dreadnaught
dreadnaught's picture

I wonder how trustworthy that USA number is?   Gold painted lead?  do they just use gold paint, or splurge and enrobe a lead brick with real gold....they would still save a ton/////

Wed, 01/28/2015 - 07:34 | 5715046 JimBowie1958
JimBowie1958's picture

No on the gold painted lead, maybe on gold plated Tungsten.

And "Given that Russia perceives itself to be under financial and economic attack from the West, ..."

Well, what the hell are sanctions if not a "financial and economic attack"?

 

 

Wed, 01/28/2015 - 03:04 | 5714811 Manipuflation
Manipuflation's picture

I am patiently waiting.  If silver keeps rising I might have to make a bullion move.   

Wed, 01/28/2015 - 01:49 | 5714715 Salsipuedes
Salsipuedes's picture

Holland's DANNY JOWENKO refuted 9/11 testimony and look where that got him!

Tue, 01/27/2015 - 23:48 | 5714422 dexter_morgan
dexter_morgan's picture

Exactly how does the IMF know how much gold Russia has? Seems like it wouldn't be in their best interests to cooperate with the IMF or be honest about the amounts, would it?

Wed, 01/28/2015 - 05:40 | 5714980 Global Observer
Global Observer's picture

It is a condition of IMF membership. All members are required to divulge gold held by the government and Central Bank to the IMF and update changes to the official gold holdings. There is no way to verify if those statements are accurate, but IMF takes them at their face value.

Tue, 01/27/2015 - 21:51 | 5714007 cheech_wizard
cheech_wizard's picture

Quick bit of research... garnered from Russian gold mining company websites.

The three major players:

Polyusgold - 2014 output 1,696 thousand ounces    ~15K employees
Norgold - 2014 output  984.5 thousand ounces         10K employees
Sibplaz - production unknown   ~95K employees   (but they apparently mine everything in Russia that can be mined).

Just looking at the first two, that's 2680.5 thousand ounces or 1,340.25 tons of gold.

The two numbers given are record outputs for each company for 2014. 2013 totals were not that much lower.

Leaves me with little doubt that Russia has what is listed above, if not some multiple of that figure. The first two companies above are highly profitable I might add.

1 yr stock return Polyusgold +33.73% (source: Bloomberg)

1 yr stock return Norgold +27.06% (source: Bloomberg)

Sibplaz is privately held.

Tue, 01/27/2015 - 23:36 | 5714383 BOPOH
BOPOH's picture

These guys got enough gold:

https://www.youtube.com/watch?v=1l6cOKE1IwY

Coming to your neighborhood!

Tue, 01/27/2015 - 21:40 | 5713970 FABBAS
FABBAS's picture

gold will trade 1520 by july 2015 and 2500 before dec 2016

 

Tue, 01/27/2015 - 21:04 | 5713797 Rootin' for Putin
Rootin' for Putin's picture

That chart is probably very wrong when you consider the location of the gold.
Only the gold in your own contries bank can really be counted and that puts china and russia at the top i expect.

Tue, 01/27/2015 - 20:30 | 5713655 Uncle Remus
Uncle Remus's picture

I have my doubts about any of the gold holdings listed in that chart. Especially the US. Now, if it had said "Goldman" not US, I might be inclined to believe that.

Tue, 01/27/2015 - 20:24 | 5713623 robnume
robnume's picture

Russia: Tell the IMF to go fuck itself! The NWO is over. USSA is a corpse and doesn't know it!

Tue, 01/27/2015 - 20:08 | 5713568 Soul Glow
Soul Glow's picture

So little gold, so much time.

Tue, 01/27/2015 - 19:30 | 5713415 rxmitch
Tue, 01/27/2015 - 19:28 | 5713410 rxmitch
Tue, 01/27/2015 - 19:27 | 5713408 rxmitch
Tue, 01/27/2015 - 19:13 | 5713349 lasvegaspersona
lasvegaspersona's picture

GLD inventories are rising again up 48 tons off their late 2014 lows. This follows a drop from 1350 tons to 704 tons in December 2014. The increases seem a significant amount but could just represent the increased tonnage passing through the various banks which comprise the ETF. Where it is all going and when will be the big surprise.

Tue, 01/27/2015 - 18:55 | 5713296 Motorhead
Motorhead's picture

Gold, bitchez!  (Well, at least that's what King World News and Jim Sinclair have been screaming, wrong that they've been over the past couple of years.)

Thu, 01/29/2015 - 01:46 | 5718962 TheReplacement
TheReplacement's picture

Aren't you glad they didn't wait until the last minute to warn you? 

Some people have no gratitude.

Tue, 01/27/2015 - 18:41 | 5713233 lakecity55
lakecity55's picture

I read anything I can get from Russell. He has a long-term view.

Tue, 01/27/2015 - 18:26 | 5713137 kchrisc
kchrisc's picture

Many have seen this article, but some haven't. For those that haven't, here it is:

http://orientalreview.org/2014/12/25/grandmaster-putins-trap/

Summary: Putin IS lovin' the west's hating, and "golden" for it.

The banksters need to repay us.

Tue, 01/27/2015 - 18:19 | 5713099 me or you
me or you's picture

I think this is a worth reading.:

AMERICAN BASES IN GERMANY AND THE GOLD BASIS
Tue, 01/27/2015 - 18:03 | 5713019 F em all but 6
F em all but 6's picture

The US holds 8100+ tons? Where? Fort Knox?? How many square feet does it take to hold 8100 tons of paper?

Tue, 01/27/2015 - 17:22 | 5712838 besnook
besnook's picture

this is the end game. everyone knows the dollar economy is dying a slow managed death everyone hopes will stay slow and managed. this gives everyone time to adjust to the new regime. watching what they do tells you what they expect(plan) to happen. the usa is curiously silent on gold except for the usual barbarous element comments. from this chart the euros in general have ignored them. i suspect the japanese are the biggest fibbers in percentages if you don't count the usa 8000 tons to zero.

if the new standard will be based upon a gold backed commodity/currency swap arrangement then the usa is way behind everyone else if the rumors of an empty fort knox are true(or it is rehypothecated onto the balance sheets of private fed member banks).

Tue, 01/27/2015 - 17:21 | 5712837 Nico Bellik
Nico Bellik's picture

just journal over 8000 US tons to China in the footnotes so no one notices

Tue, 01/27/2015 - 17:04 | 5712734 Jano
Jano's picture

China and 1ooo tons?
Last summer was already on the table, that they are somewhere at 5tt.
what a cooked data.

Tue, 01/27/2015 - 20:29 | 5713645 Transformer
Transformer's picture

That's assuming they didn't have any when we started counting.

Tue, 01/27/2015 - 16:48 | 5712667 Greenspazm
Greenspazm's picture

Communications of this type are worthless in absence of knowledge of whether the Dutch or any other Western central bank will lease gold into the market, even if they now have it physically.

One-line balance sheet entry: gold and gold receivables.

Tue, 01/27/2015 - 16:49 | 5712662 semperfi
semperfi's picture

those that have done their homework properly know that Russia has over 20,000 tonnes, and maybe closer to 30,000

Tue, 01/27/2015 - 18:13 | 5713065 prefan4200
prefan4200's picture

Can you share some of that "homework" or sources, please?  Cuz I don't know about that, 20k or 30k tons is a shitload of gold, many multiples over what most sources seem to indicate as Russia's gold holdings.  If the Russians actually have that much gold and decide to go public and announce it, the game gets a whole lot more interesting, and damn fast.

Tue, 01/27/2015 - 20:27 | 5713639 Transformer
Transformer's picture

I have heard this number too, from several sources.  Willie says this amount, and some others say 10-20.  I sure would like to know wher they get their data and how they figured it.

Tue, 01/27/2015 - 16:47 | 5712660 Agstacker
Agstacker's picture

How do we know the US has that much gold when it hasn't been audited since 1953?

Tue, 01/27/2015 - 18:19 | 5712670 Greenspazm
Greenspazm's picture

Because James G Ricktards says so, and he has impeccable sources.

edit: someone here doesn't understand sarcasm.

Tue, 01/27/2015 - 12:42 | 5711220 me again
me again's picture

Runtin for Putin. But not just with my mouth.

Tue, 01/27/2015 - 17:22 | 5712841 Nico Bellik
Nico Bellik's picture

lol you gotta purty mouth!

Tue, 01/27/2015 - 12:32 | 5711165 sprintjump
sprintjump's picture

Why should they have to 'declare' to the IMF how much they have?

On another note, what are folks outlook on the ruble? Is holding rubles, a smart 'long' move? The currency has a very long history, and obviously Russia sits on a vast amount of natural resources. Can the ruble be viewed along the same lines as PM's when the dollar bubble finally pops?

Tue, 01/27/2015 - 23:59 | 5714459 litemine
litemine's picture

To join the IMF, Countries could not back their currecy's with Gold. My guess is that when a central Bankowns/buys gold it must be declared.  But, if a country does not back their currency with gold but with Paper SDR's then they can be a member.  England held out their gold sales and sold at the Low. Now, the banks are not playing the game and accumulating gold as insurance and don't whan "sanctions against their Country from the Elite , but in Russia's case........They at this point don't care? More to follow. Personally, I wish Canada would do the same.

End connections with the Fed. They are a private Corporation and they have no transparency...........No Trust.

Funny thing is the World revolting against a Bankers Race......Yet protected when even stating that you hate them....Something seems Oh....So....Wrong.

Politicians work for Lobbiests....Not for those who Vote.

Get Religion out of Politics.   

Tue, 01/27/2015 - 22:17 | 5714144 Bemused Observer
Bemused Observer's picture

Seriously! Why SHOULD they have to declare what they have? If I was Russia, and they asked me what I had, I'd just say "Enough, asshole, I have enough. Next question..."

Tue, 01/27/2015 - 17:27 | 5712866 Latitude25
Latitude25's picture

Look at the ruble like the Saudi rial was way back when they were only camel jockeys living in tents.

Tue, 01/27/2015 - 12:41 | 5711214 me again
me again's picture

Holding on to my June '15 Russian Ruble Contracts on the CME; will roll them over. Reccommend Russian Bank CD at 17.5%; the Ruble will be worth more next year and you get to keep the 17.5%.  Never be embarrased to take advantage of stupid people; like Obama, for instance.

Tue, 01/27/2015 - 12:22 | 5711111 basho
basho's picture

the dutch have been getting a lot of things wrong lately.

we can start with MH17 from amsterdam

Wed, 01/28/2015 - 00:07 | 5714486 litemine
litemine's picture

Just a thought.   Can Boing 777 be controled Via remote control? Never Mind......Another American Security Secret......same as HFT and all other very bad things.................Haarp,............GMO's,..................Injections That we don't need, (don't work and are costly),............Depleted Uranium Weapons.

Maybe an "Accident" would rid us of these parisites.

Tue, 01/27/2015 - 12:20 | 5711108 KnuckleDragger-X
KnuckleDragger-X's picture

Tsk, Russia just isn't buckling under like they are supposed to, but thankfully they are buying that barbarous relic of the past instead of REAL money fresh off the printing press.....

Tue, 01/27/2015 - 19:24 | 5713387 kill switch
kill switch's picture

U.S.  8,133.5 tonnes hahahahahahahahah!!!All gone amigo!!!!! They have 3000 tonnes that they transfer back and forth between the fed and jpm vaults for fake audits...

Tue, 01/27/2015 - 23:22 | 5714337 Rusty Shorts
Rusty Shorts's picture

..what about Yamashita's Gold? GW Bush found it...they say..

Tue, 01/27/2015 - 12:46 | 5711244 Augustus
Augustus's picture

Buckling Under has nothing to do with it.

If Russia is able to find someone stupid enough to accept rubles for gold, at any ruble price, Russia can put a few printers on overtime to get a big package shipped out.

Tue, 01/27/2015 - 22:59 | 5714249 FIAT CON
FIAT CON's picture

"If Russia is able to find someone stupid enough to accept rubles for gold, at any ruble price, Russia can put a few printers on overtime to get a big package shipped out."

Isn't that what the US does.

Tue, 01/27/2015 - 22:36 | 5714201 Bossman1967
Bossman1967's picture

Cant wait. For the west to cut Putin off the swift payment system friday after markets close. Can you say WW3 i am tired of this slow gring and Russia accumulating gold and dumping thier dollars. 1plus 1 equals 2 all but hey I may be wrong. Now tomorrow yellen comes out with her bi weekly save of the markets and by friday we are at records but gold 1350 silver 19 now I have made a projection

Tue, 01/27/2015 - 18:46 | 5713248 lakecity55
lakecity55's picture

I think Vlad is dumping Treasuries. For Au.

Remember, they reserved the right to counter-attack after Dumbass USG fucked up their Ruble.

But, their counter-attack will be smart and financial, IMO.

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