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Why Did European Central Banks Sell Gold?

Posted by eeos @ 23:39 on November 19, 2014  

In 1991 the Dutch central bank (DNB) held 1,700 tonnes in official gold reserves, currently they have 613 tonnes – of which 67 tonnes are stored in Amsterdam, 300 tonnes at the Federal Reserve Bank Of New York (FRBNY), 123 tonnes at the Bank Of England (BOE) and 123 tonnes in Ottawa. The exact locations of the Dutch gold was first disclosed after a member of The House Of Representatives, E. Irrgang (party: SP), officially asked about the details of the Dutch holdings at the Secretary Of The Treasury, J.C. de Jager, in 2011 in the heat of the Eurocrisis. Reading back the answers from de Jager, I noticed some remarkable answers. I translated a few snippets. Question by Irrgang, answers by de Jager:

Question 1: Has the DNB leased any of its gold holdings, if so, to whom?

Answer 1: DNB has stopped all gold leasing activities in 2008.

Question 6:  Can you confirm that since 1991 DNB has sold 1,100 tonnes of the 1,700 tonnes it owned…

Answer 6: Since 1991 DNB sold 1,100 tonnes. At the time DNB determined that from an international perspective it owned a lot of gold proportionally. It decided to equalize its gold holdings relative to other important gold holding nations. 

This last two sentences caught my attention, it  could imply two things:

  • the DNB sold gold to lower its holdings in order to be on par with other important gold holding nations.
  • the DNB sold gold to redistribute gold among central banks around the world proportionally to the size of their economy.

In a report from the DNB, released in  2010, titled Money and Gold we can read some comments of the DNB on their sales: Read more

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Post by the Golden Rule. Oasis not responsible for content/accuracy of posts. DYODD.