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Gold Holdings of Eurozone Rise to 10,792 Tonnes – ECB’s “Reserve of Safety” Accumulated

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Gold Holdings of Eurozone Rise to 10,792 Tonnes – ECB’s “Reserve of Safety” Accumulated

The Eurozone raised its gold holdings by 7.437 tonnes to 10,791.885 tonnes in January, International Monetary Fund data released overnight showed.

The rise in gold holdings was small in tonnage terms and in percentage terms  – especially when viewed in the light of the recently launched ECB’s EUR 1 trillion QE monetary experiment.

Nevertheless, the rise in euro area gold holdings shows how the ECB continue to view gold as an important monetary asset. Mario Draghi said of gold in October 2013 that gold is a “reserve of safety” that “gives you a value-protection against fluctuations against the dollar.” 

Draghi told an open forum at Harvard’s Kennedy School of Government, why central banks want gold and what value it offers. He said that there were “several reasons” to own gold including “risk diversification”.

The increase in reserves came at a time, January, of rising gold prices amidst the reemergence of the Greek debt crisis.

It may signal that the ECB and Eurozone are set to embark on a gold accumulation programme. More likely, it is simply a way to bolster confidence in the euro due to increasing doubts about the viability of the single currency.

goldcore_bloomberg_chart4_24-02-15

Russia sold a very small amount of gold in January for the first time since March. Russia lowered its reserves to 1,207.7 tons from 1,208.2 tons, ending nine months of consecutive purchases, the IMF data showed.

Russia, the world’s fifth-biggest gold holder, had been adding to its holdings for many years in order to bolster the rouble.

Before last month, Russia had bought at least 18 tons a month since September and more than tripled its holdings since 2005.

Turkey’s gold reserves fell marginally last month along with Mexico and Belarus, the data showed.

Kazakhstan increased gold reserves for the 28th straight month, while Ukraine added to holdings for the first time since August, the data showed. Kazakhstan boosted holdings to about 193.5 metric tons from 191.8 tons a month earlier as Ukraine’s rose to 23.9 tons from 23.6 metric tons.

Kazakhstan’s hoard rose 33 percent in the past year alone and more than doubled in the past three years.

Ukraine’s assets dropped in November to the lowest level since 2005 as its foreign currency reserves contracted and the hryvnia slumped amid the conflict and collapsing economy. There were also concerns that the newly installed government had acquired the gold and moved it offshore, out of Ukraine.

Central banks are some of the largest buyers of gold today – see table above. Central banks have been adding to their gold reserves for the past five years, a reversal from two decades of selling since the late 1980s. They were net buyers in 2014 and are set to be net buyers again 2015.

Governments bought 477.2 tons of gold bullion in 2014, the second-biggest increase in 50 years, and purchases will be at least 400 tons this year, the World Gold Council has estimated.

The smart money will continue to follow the lead of central banks internationally and gradually accumulate gold and dollar, euro or pound cost averaging into an allocated and segregated physical gold position.

Daily and Weekly Updates Here

 

MARKET UPDATE

Today’s AM fix was USD 1,195.50, EUR 1,057.97 and GBP 774.59 per ounce.
Yesterday’s AM fix was USD 1,193.50, EUR 1,055.17 and GBP 777.12 per ounce.

Gold rose 0.09% percent or $1.10 and closed at $1,202.10 an ounce on yesterday, while silver climbed 0.56% percent or $0.09 closing at $16.32 an ounce.

Gold in US Dollars - 5 Years (GoldCore)

Gold in US Dollars – 5 Years (GoldCore)

Spot gold was down 0.4 percent at $1,196.80 an ounce in late morning in London, after prices were flat in Singapore. Silver was down 0.3 percent at $16.24 an ounce, platinum slipped by 0.2 percent to $1,158.55 and palladium fell 0.2 percent to $783.15.

Gold slipped below $1,200 an ounce today but recovered from its 7 week low hit yesterday as optimism is abound that the Greek bail-out deal will be finalized today.

The close above $1,200/oz yesterday was encouraging from a technical perspective.

Some speculated that Federal Reserve Chairperson Janet Yellen’s pending congressional testimony added some pressure on the yellow metal and strengthened the U.S. dollar.

Yellen will address the Senate Banking, Housing and Urban Affairs Committee at 10 a.m. on Tuesday (EST) and the House Financial Services Committee on Wednesday.

Market participants are looking for any further guidance on the timing of when the U.S. Fed may raise interest rates.

Yellen’s European counterpart ECB chief Mario Draghi is also set to make a speech today at 3 p.m. CET unveiling the new €20 banknote in Frankfurt.

The world’s second largest consumer of gold, China, is still celebrating its Lunar New Year holiday today and returns tomorrow which should be gold supportive.

Gold had its biggest monthly advance in three years in January prior to giving up those gains in recent weeks.

Gold climbed 8.4 percent in January in London as policy makers in Europe and Asia signaled more stimulus to battle slowing economic growth and investors speculated that Greece may be forced to quit the euro.

Bullion traded at $1,195.80 an ounce on today. With gold being some 37 percent below the nominal record high set in 2011, contrarian investors continue to accumulate on weakness.

www.goldcore.com

 

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Tue, 02/24/2015 - 14:27 | 5823080 Conax
Conax's picture

I don't believe any of this horseshit.  The gold holdings of banks and governments around the world are the biggest secrets they have, they all lie like hell. 

Tue, 02/24/2015 - 12:37 | 5822669 IndianaJohn
IndianaJohn's picture

I want to see the hoard.

Tue, 02/24/2015 - 13:08 | 5822663 RaceToTheBottom
RaceToTheBottom's picture

In a thoroughly unrelated event, the run on gold spray paint across Europe continues.  Officials replied "No comment" when asked if they had any explanation.

Tue, 02/24/2015 - 12:34 | 5822651 GtownSLV
GtownSLV's picture

Central banks buy 2,000 tons of gold in 4 years and the price drops 30% ????? Just get the collapse over with already!

Tue, 02/24/2015 - 13:37 | 5822873 lunaticfringe
lunaticfringe's picture

Correct. The more you buy, the further the price drops. Had they bought 4 or 5 thousand tons we'd have gold trading at an 800 dollar handle.

You'd think this was insane but I can offer proof. Within months after each country demanded their gold back, there was a corresponding price drop. The chart began to break down after Venezuela demanded their gold back. The gold price took its greatest hit after Germany demanded their gold back.

If every country would simply demand that every bullion bank return their gold immediately- we might be able to pick gold up at 100 bucks an oz.  

Tue, 02/24/2015 - 12:27 | 5822630 NoWayJose
NoWayJose's picture

If you look in the vault you will see one ton of physical and 10,791 IOUs.

Tue, 02/24/2015 - 16:04 | 5823586 Greenspazm
Greenspazm's picture

Gold and Gold receivables.

Tue, 02/24/2015 - 11:46 | 5822546 victorher
victorher's picture

Amazing, 3300 tons more, from 7400 to 10800,  is small in tonnage terms, what do they consider a big increase?

Tue, 02/24/2015 - 13:26 | 5822820 holgerdanske
holgerdanske's picture

There is a big difference between a , and a . We are talking about 7 odd tonnes.

I don't even know if we can trust them


Tue, 02/24/2015 - 13:18 | 5822796 MauritiusGold
MauritiusGold's picture

By 7.4 tonnes. Are you reading with gold tinted spectacles? :)

Tue, 02/24/2015 - 12:00 | 5822614 Ghordius
Ghordius's picture

lol, agree

further, the article claims (any corroboration?) / continues :"...especially when viewed in the light of the recently launched ECB’s EUR 1 trillion QE monetary experiment"

well, is the eurozone QE being used to buy - gasp - gold?

as a reminder, the EuroSystem QE is structured so that the national banks participating to the ECB/EuroSystem are actually the actors of most of it

is the gentlemen's agreement with the US and UK about not buying gold in order to keep them happy... at an end? we'll see, but it would be hilarious if so

Tue, 02/24/2015 - 15:21 | 5823318 bwh1214
bwh1214's picture

Do as they do not as they say. Buy Gold!!!

Tue, 02/24/2015 - 15:25 | 5823333 Dame Ednas Possum
Dame Ednas Possum's picture

Both points equally well made.

Bravo sir!

Tue, 02/24/2015 - 15:21 | 5823317 bwh1214
bwh1214's picture

Do as they do not as they say. Buy Gold!!!

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