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Sharp Increase In Central Bank Gold Reserves – South Korea Up 17 Fold & Thailand 15.5% In 2 Months

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From Gold Core

Sharp Increase in Central Bank Gold Reserves – South Korea Up 17 Fold & Thailand 15.5% in 2 Months

Gold is higher in all currencies today except for the Swiss franc and is trading at USD 1,629.20 , EUR 1,147.30 , GBP 1,000.20 and CHF 1,270.10 per ounce. Gold’s London AM fix was USD 1624.00, EUR 1145.28, GBP 997.30 (10:41 GMT).

Gold reached new record nominal highs in euros and Canadian dollars yesterday at EUR 1,149.60 and CAD 1,566.48 yesterday and remains close to these record highs today and close to record highs in most fiat currencies.

Cross Currency Rates

European indices are lower after Asian indices fell ( Nikkei -1.2%, Sensex -1.1%, Shanghai -0.72%, Hang Seng -1.07, STI -1.25% and the South Korea’s Kospi was the worst performer falling 2.35%).

The Italian MIB is down another 0.9% and jitters abound about Italian banks and banking sector.


Gold in Euros – 30 Day (Tick)

Spanish and particularly Italian bonds are under pressure today with the Spanish 10 year rising to 6.37% and the Italian 10 year rising to 6.21%. Spain and Italy’s debt markets are beginning to look like Portugal and Ireland’s prior to their bond yields surged to over 10%.

Gold in GBP– 30 Day (Tick)

Further confirmation in the continuing stealth accumulation of bullion by central banks came overnight with confirmation that South Korea's central bank bought 25 tonnes of gold  over the past two months. The gold is worth $1.24 billion and resulted in a 17 fold increase in their gold reserves.

Thailand’s gold reserves rose by 15.5% in the two months and rose to about 4.07 million ounces in June, from about 3.523 million ounces in May, according to figures on the Bank of Thailand’s website accessed by Bloomberg this morning.

South Korea is the world’s seventh-biggest foreign-exchange reserve holder and 64% of its reserves are in U.S. dollars. The bank said that it also holds euros and other assets and the move was about achieving diversification.
The BOK’s reserves, stored in London in the vaults of the Bank of England, increased 25 tonnes to 39.4 tonnes (from 14.4 tonnes) but remain meager when compared to the size of their foreign exchange reserves.

BOK's gold holdings, at today’s market prices, account for 0.7% of its reserves, up from 0.2% prior to the purchase.

The BOK reserves were at a record high of $311.03 billion at the end of July which puts this $1.25 billion gold purchase in perspective.

Their gold reserves and those of other Asian central banks, particularly the People’s Bank of China, remain meager when compared to those of western central banks and the U.S.

Earlier this year, Thailand, whose gold holdings account for only 2.9 percent of reserves, bought 9.3 tonnes of gold. Russia purchased 41.8 tonnes and Mexico bought 99.2 tonnes.

China is the world's sixth largest gold holder and the biggest among Asian banks with 1,054.1 tonnes, equivalent to just 1.6% of their massive currency reserves.

According to the World Gold Council, governments hold an average of 10 per cent of foreign exchange reserves in gold. Larger economies such as the US, France and Germany hold more than 50 per cent.

"As a real safe asset, gold helps us to cope effectively with changes in international financial market," said Jaehyun Joo of the Bank of Korea.
"We expect that gold would serve as a safety net for official foreign reserve and enhance the stability of the Bank Of Korea's foreign reserve management," Mr Joo added.

Mr Joo’s comments reflect the mindset of people and central bankers in Asia who realize gold’s store of value importance and are increasingly concerned about the euro, the dollar and the global financial and monetary system.

The “Asian put” continues to place a very stable floor under the gold market and means that gold is not seeing any meaningful correction.

This is likely to continue for the foreseeable future and means that investors would be advised to allocate to gold sooner rather than later as a meaningful price correction is unlikely.

Some weakness in gold may be seen if we experience another bout of misplaced ‘market euphoria’ and risk appetite once the debt deal is fully completed. However, this will likely be more short term weakness as the medium and long term fundamentals remain sound.

Smart money and official demand for gold remains robust as a very fragile global economic recovery, stubbornly high inflation in many countries and sovereign debt and contagion risks lead to diversification into gold.

For the latest news, commentary, infographics and videos on gold and financial markets follow us on Twitter

NEWS
Gold nears record after US debt deal, Korean purchase
http://in.reuters.com/article/2011/08/02/idINIndia-58577120110802

South Korea lifts gold reserves 17-fold
http://www.ft.com/intl/cms/s/0/1e536470-bcc0-11e0-adac-00144feabdc0.html#axzz1TrDIXm5V

Gold May Advance to Near Record as Slower Factory Growth Increases Demand
http://www.bloomberg.com/news/2011-08-02/gold-may-advance-to-near-record-as-slower-factory-growth-increases-demand.html

Gold edges up after South Korea buy
http://www.reuters.com/article/2011/08/02/businesspro-us-markets-precious-idUSTRE7592IU20110802

Korean Central Bank Moves Into Gold
http://online.wsj.com/article/SB10001424053111903520204576483223952488748.html?mod=googlenews_wsj

S Korea buys gold as safe haven, first time since '98
http://www.bbc.co.uk/news/business-14368064

Gold Coins Sell Out in Lisbon as Biggest Bet Sees 22% Gain
http://www.bloomberg.com/news/2011-08-01/gold-coins-selling-out-in-downtown-lisbon-as-biggest-wager-sees-11-gain.html

COMMENTARY

The Imminent $2.5 Trillion Debt Ceiling Hike Will Unleash A Gold Price Surge To $1,950 And Higher
http://www.zerohedge.com/news/imminent-25-trillion-debt-ceiling-hike-will-unleash-gold-price-surge-1950-and-higher

'By every metric' gold is cheap, Rickards tells King World News
http://kingworldnews.com/kingworldnews/Broadcast/Entries/2011/7/30_Jim_Rickards.html

Ron Paul: When a Cut is Not a Cut
http://news.goldseek.com/RonPaul/1312217180.php

It doesn’t matter who is in charge – buy gold
http://www.moneyweek.com/news-and-charts/economics/global/it-doesnt-matter-who-is-in-charge-buy-gold-54829

 

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Tue, 08/02/2011 - 07:28 | 1516102 Sudden Debt
Sudden Debt's picture

European indices are lower after Asian indices fell

DON'T WORRY! IT'S JUST A SOFT SPOT!

Tue, 08/02/2011 - 07:29 | 1516104 Cassandra Syndrome
Cassandra Syndrome's picture

If there is to be a return to the Gold Standard it will be prepared in secret and announced over night to ensure continuity of trade and indirect exchange. Its not something TPTB would announce as a future event.

Tue, 08/02/2011 - 07:50 | 1516134 johny2
johny2's picture

First we are going to have lots of other events, starting with private confirmations of QE3, than its public announcement. I reckon the final nail in the coffin of the fiat currencies is going to be a first default on the silver contract. 

Tue, 08/02/2011 - 08:51 | 1516261 Smiddywesson
Smiddywesson's picture

Right.  The central bankers have had several years to prepare for the new standard, possibly a real gold standard, or more likely, something that gives them an out in the future to return to paper.  Our socieity is balanced on the edge of a knife, so I completely agree, if the switch is not seemless, there will be starvation and riots. 

Preparation would undoubably require that all of the largest central bankers were in on the early planning.  This is what was done in Bretton Woods, hundreds of delegates attended, but only a select few met after hours to make the real decisions. 

The next step would to brief all of the central bankers from the larger countries.  This no doubt occurred sometime in late 2009, because shortly afterward central banks started to acquire gold.  They didn't all start buying gold at once based on observation (they are, after all, a bunch of clueless economists) but inside information.

The most important aspect of the switch was an agreement to allot a fixed amount of gold purchases to each country.  This would be a logical necessity, otherwise the price of gold would have gone vertical before all the conspirators acquired what they needed. 

Naturally, such agreements, secret or not, are vulnerable to cheaters, similar to the members of OPEC pumping more than their allotment of oil.  The numbers provided in the article are interesting, but I would bet my life they are a bunch of baloney.  Nobody knows, including the other central bankers, how much gold is actually being acquired by each individual central bank.  We already have ample evidence of this inasmuch as China has already changed their story about past acquisitions.  The co-conspirators, like all crooked co-consirators, are starting to stab each other in the back.  We can expect a lot more volatility in PMs in the future, both because we are reaching End Game and because the conspiracy will eventually fall apart.

Ft. Knox:  I believe it was pretty much emptied out too, but I don't believe it is empty now.  This conspiracy of central banks to switch to a gold standard was probably hatched in NY and Wash D.C. in 2009 when they discovered that the stronghold they built based on Keynesian theories was just a sand castle.  After the economy failed to recover, I think the biggest stimulus in history was intended in part to enable the banks who had paper gold in Ft. Knox to replace it with physical.  This covered the tracks of the conspiracy that is central banking fiat and PM suppression.  The Fed acts in secrecy and has limitless paper, why would they leave Ft. Knox empty when they know the jig will be up soon?  Do you think these cockroaches intend to scurry away, or to continue to "guide" us?  That tells you whether the gold is being replaced or not. 

When the change comes, the same guys who caused all these problems are going to step forward and present themselves as heroes for "solving" them.  They have no intention of ceding power to anyone, so the gold has to be replaced before it is proved it is missing.     

Tue, 08/02/2011 - 09:40 | 1516460 gmrpeabody
gmrpeabody's picture

Interesting take Smiddy.

Tue, 08/02/2011 - 07:31 | 1516106 Sudden Debt
Sudden Debt's picture

Where does all that gold come from?

Is somebody crapping it out? I knew beans are good for you, but HELL! YOU CAN ACTUALLY GET RICH FROM EATING THOSE!

 

Tue, 08/02/2011 - 07:48 | 1516129 TSA Thug
TSA Thug's picture

Just another manic Tuesday? Or are you high?

Tue, 08/02/2011 - 07:33 | 1516108 Pete15
Pete15's picture

Tradition holding strong 

Tue, 08/02/2011 - 07:33 | 1516109 Quintus
Quintus's picture

Seems that this 'Tradition' thing is really catching on.

Tue, 08/02/2011 - 07:44 | 1516122 GubbermintWorker
GubbermintWorker's picture

I'm sure the Bernank would think this tradition is just transitory.

Tue, 08/02/2011 - 07:38 | 1516114 johny2
johny2's picture

Bernanke is the biggest and most sucesfull gold bug that ever lived. 

Tue, 08/02/2011 - 07:39 | 1516116 jkruffin
jkruffin's picture

Is there any doubt Gold will be $1700 by the end of the week? $2000 by end of the year and maybe higher.....

Tue, 08/02/2011 - 08:57 | 1516295 Smiddywesson
Smiddywesson's picture

Yes I think the gradual march in prices is imperiled by world events.  I don't think they will be able to hold the conspiracy together much longer.

Tue, 08/02/2011 - 07:40 | 1516118 Big Fat Liar
Big Fat Liar's picture

I don't understand. Gold is not money. Why are they stocking up on tradition?

Tue, 08/02/2011 - 07:40 | 1516119 Big Fat Liar
Big Fat Liar's picture

I don't understand. Gold is not money. Why are they stocking up on tradition?

Tue, 08/02/2011 - 07:45 | 1516123 gwar5
gwar5's picture

.

 

Bang Dai Ho: "Hyundais, Bitchez. We give you Sonatas, now all your gold is belong to us."

Tue, 08/02/2011 - 10:54 | 1516690 Pegasus Muse
Pegasus Muse's picture

We really like our Tuscon.  Nice ride.  Good price.

Tue, 08/02/2011 - 07:46 | 1516125 nod2glod
nod2glod's picture

South Korea has entrusted the gold to the BoE, fools.

 

"The BoK declined to disclose the purchase price but said it had entrusted all of its gold holding to the Bank of England for possible use in gold lending and other related transactions in future." - reuters

so i guess this will be swapped out to GLD to keep that ponzi going.

Tue, 08/02/2011 - 07:49 | 1516131 cossack55
cossack55's picture

My thoughts exactly. Kinda like asking Obummer to hold a pack of smokes and a Big Mac for ya.  I guess they forgot the whole reading history thingy.

Tue, 08/02/2011 - 09:00 | 1516311 Smiddywesson
Smiddywesson's picture

Yes, that and Korea doesn't want to end up like Tibet and have China make a withdrawal (So solly Cholly)

Tue, 08/02/2011 - 07:48 | 1516127 slaughterer
slaughterer's picture

Beware of these Gold Core reports on ZH.  They most always signal a drop in paper PM prices. 

Tue, 08/02/2011 - 07:49 | 1516130 TSA Thug
TSA Thug's picture

Word up.

Tue, 08/02/2011 - 07:50 | 1516133 Quintus
Quintus's picture

Since it's a daily post, that's hardly the case.

Tue, 08/02/2011 - 08:08 | 1516160 DaBernank
DaBernank's picture

Just wait 10 minutes and the "drop" will revert upward.

Tue, 08/02/2011 - 09:07 | 1516336 Smiddywesson
Smiddywesson's picture

Yes, the dips are losing strength and duration.  It will be interesting if TPTB can accomplish another attack like they did in May.  My guess is no.  They are reaching diminishing returns.  People are buying the dips like crazy, both the outsiders who finally get it, and the insiders who promised only to buy so much but just can't help themselves.

Tue, 08/02/2011 - 09:08 | 1516337 Smiddywesson
Smiddywesson's picture

duplicate

Tue, 08/02/2011 - 07:49 | 1516132 Real Estate Geek
Real Estate Geek's picture

TD,

Please consider deleting the account of "natty," who is posting ads.

TIA

Tue, 08/02/2011 - 07:52 | 1516135 cbaba
cbaba's picture

Good and Bad for Koreans, buyig gold is the only sane idea but keeping the gold in the bank of England is their biggest mistake...the BOE is owned by Rotshchild and that Korean Gold will be sold to investors many many times.

 

 

Tue, 08/02/2011 - 08:39 | 1516212 Herbert_guthrie
Herbert_guthrie's picture

He who owns the gold rules, and he who owns the gold has an agenda of worldwide currency devaluation which will make it even more valuable.

Central banks stocking up on gold.
Central banks monetizing debt.

The "plan" to take them down by hoarding PMs is ludicrous.
It is only following their script.

Tue, 08/02/2011 - 09:14 | 1516375 Smiddywesson
Smiddywesson's picture

He who owns the gold rules, and he who owns the gold has an agenda of worldwide currency devaluation which will make it even more valuable.

This is the key to why I call bull on any price target based on past gold performance.  This is not a bubble, and the chief holders of gold are the same ones who have demonstrated near limitless abilities in manipulating the price down.  Once their self interest is to manipulate it up, how can any of us say it will stop at $5000?  $10,000? $60,000?

To do so and pick a price target is to assert that these fellow have a limit to their greed.  The only thing which will cap gold prices is a loss to their credibility (in their opinion, we know they have no credibility) or a price that is so high it hurts the industries that use (limited amounts of) gold.  On the other hand, a short spike in gold prices above that cap won't destroy those industries and allow TPTB to offload some of their horde for the new paper.

Tue, 08/02/2011 - 08:05 | 1516149 GFORCE
GFORCE's picture

BOK- We got your gold!

Tue, 08/02/2011 - 08:42 | 1516218 Clint Liquor
Clint Liquor's picture

If the BOK bought Gold from the LME and the BOE is holding it for them, they own paper only. And as we all know, paper is for wiping your butt with.

Tue, 08/02/2011 - 09:33 | 1516437 Temporalist
Temporalist's picture

I've said over the past half year or more the next real strong bullish sign will be another CB buying over the India floor and here it is finally!

 

Now all the hedgies can pick their chins off the floor from disbelief and jump onto the PM train before it's gone.

Tue, 08/02/2011 - 09:36 | 1516446 dark pools of soros
dark pools of soros's picture

so who are they buying it from??  another central bank?  then it's a zero sum move..  and did they take delivery? or is this just the same bar from 2000 years ago being bought by its 1000th 'owner'

 

Tue, 08/02/2011 - 10:15 | 1516576 rfullem
rfullem's picture

gold is worth the price, paper, and liqudity says it is worth.  CB gold is different. Its monetary value is "zero + global GDP growth" - because it is a perpetual transfer of "reserves" - ie it is not expected to ever hit the market except on broad liquidation - in other words, gross global leverage forces everyone to liquidate - not merely transfer wealth.  Its perceived value is political and sales. RM says "I dont like US or USD so I buy gold" Bank trading desks - long up the bum -  say "yes, it is good diversificaiton, blah , blah,blah, let me sell you an ETF"  Funds are in for the ride declaring how they are genuises.  try something new.

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