A central bank governor says he never expects to use his country’s gold, but his institution has spent months, and real money, moving 86 tonnes of it across an ocean so it can be used the moment it is needed. That is a real contradiction and one that sits at the heart of our latest video.
De Nederlandsche Bank has rebalanced its gold reserves away from New York and Ottawa and into London, citing “geopolitical unrest,” though the fuller explanation lies in a single word buried further down its press release. We walk through what actually happened, why London rather than somewhere closer to home became the destination, and what a 1930s precedent tells us about the weight behind this decision. We also cover the growing pressure to have gold formally recognised as a High Quality Liquid Asset within banking regulation, and what it means for anyone holding physical gold personally rather than through a central bank vault.
France has already emptied its gold out of the New York Fed entirely. Germany faces the same pressure at home. This is not likely to be the last move of its kind, and today’s market gives a fairly immediate sense of why.
At the time of writing, gold is having a decent day, trading around $4,470 to $4,490, up half a percent to a full percent, and that’s on top of an already strong August. Fittingly, given everything above, the move comes courtesy of the exact kind of geopolitical unrest DNB was pointing to in its own statement: Trump described a “very heavy” US strike on Iran on Wednesday, while also suggesting it wouldn’t drag on, and traders have been reacting to that mixed signal ever since. Silver’s tagging along nicely, sitting around $66 and up roughly 60 percent on where it was a year ago.
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