Pension Funds, Sovereign Wealth Funds, Central Banks “Stock Up” on Gold “Amid Uncertainty”

Pension Funds, Sovereign Wealth Funds and Central Banks “Stock Up” on Gold “Amid Uncertainty”

By Attracta Mooney
Financial Times, London
Sunday, June 11, 2017

The gold reserves of the world’s biggest public sector investors reached an 18-year high as they hoarded the precious metal after Donald Trump’s election and the Brexit vote added to geopolitical uncertainty.

State investors increased their net gold holdings by 377 tonnes to an estimated 31,000 tonnes last year — the highest level since 1999, according to a study of 750 central banks, public pension plans and sovereign wealth funds with $33.5 trillion in assets.

Danae Kyriakopoulou, chief economist at the Official Monetary and Financial Forum, the central bankers’ forum that compiled the research, said state investors had flocked to the precious metal because of its status as a “haven asset” and to take advantage of rising prices.

“There was a lot of political uncertainty in the past year. There were big political shocks with Brexit and Trump, which have driven investors back to gold,” she said.

The price of gold surged after the unexpected Brexit vote in June and immediately after the election of Mr. Trump in November, although it fell in the final weeks of the year.

Alistair Hewitt, head of market intelligence at the World Gold Council, said state-backed investors had also increased their gold stores as a hedge against the stronger dollar. The dollar is up 15 percent against the pound over the past year.

“Central banks and public institutions have been adding to their strategic gold holdings for a number of years,” Mr. Hewitt said. “A lot of emerging market central banks hold significant amounts of US dollars, and they have bought gold as a hedge against this concentrated currency exposure.” …

Remainder of report via FT: State investors stock up on record gold reserves amid uncertainty

In 2013, the global monetary think-tank, the Official Monetary and Financial Institutions Forum (OMFIF),  warned in a wide-ranging analysis of the world monetary system of “twin shocks” to the dollar and the euro and of a “coming dollar shock” and pointed out how gold would be a safe haven in a dollar crisis.

Demand for physical gold is likely to rise as the world heads towards a multi-currency reserve system under the impact of uncertainty impacting the stability of the dollar and the euro, the main currencies held by central banks and sovereign wealth funds.
See here: “Gold Will Prove A Haven From Currency Storms” – OMFIF Study

News and Commentary

Gold Rally Limited to U.K. as Impact of Political Turmoil Muted (Bloomberg.com)

State investors stock up on record 31k tonnes of gold reserves – highest since 1999 (Gata.org)

Law Will Oblige Travelers Entering US to Declare Digital Currency Holdings (AltCointToday.com)

Sibanye Gold say South Africa wildcat strike continues, 138 arrested (Reuters.com)

Nevada Becomes First US State to Block Blockchain Taxes (CoinTelegraph.com)

The Strange Secret History of Operation Goldfinger (NewYorker.com)

Bringing 1/2 of Germany’s Gold Back (Handelsblatt.com)

Barack Obama – The $600 Billion Man (BonnerAndPartners.com)

Santander acquistion of Banco Popular shows “financial system insane” (ValueWalk.com)

Another Day of Salami Slicing in Silver and Gold (GoldSeek.com)

Avoid Digital & ETF Gold – Key Gold Storage Must Haves

Gold Prices (LBMA AM)

12 Jun: USD 1,269.25, GBP 998.14 & EUR 1,131.28 per ounce
09 Jun: USD 1,274.25, GBP 1,001.31 & EUR 1,139.18 per ounce
08 Jun: USD 1,284.80, GBP 992.12 & EUR 1,142.70 per ounce
07 Jun: USD 1,292.70, GBP 1,001.07 & EUR 1,146.62 per ounce
06 Jun: USD 1,287.85, GBP 997.31 & EUR 1,144.77 per ounce
05 Jun: USD 1,280.70, GBP 992.41 & EUR 1,136.88 per ounce
02 Jun: USD 1,260.95, GBP 980.39 & EUR 1,123.88 per ounce

Silver Prices (LBMA)

12 Jun: USD 17.13, GBP 13.50 & EUR 15.27 per ounce
09 Jun: USD 17.35, GBP 13.60 & EUR 15.52 per ounce
08 Jun: USD 17.60, GBP 13.60 & EUR 15.67 per ounce
07 Jun: USD 17.60, GBP 13.64 & EUR 15.71 per ounce
06 Jun: USD 17.56, GBP 13.61 & EUR 15.62 per ounce
05 Jun: USD 17.52, GBP 13.58 & EUR 15.59 per ounce
02 Jun: USD 17.19, GBP 13.37 & EUR 15.33 per ounce


Recent Market Updates

– 4 Charts Show Gold May Be Heading Much Higher
– Gold in Pounds Surges 1.5% To £1,001/oz – UK Political Turmoil Likely
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– Gold Breaks 6-Year Downtrend On Safe Haven and 50% Surge In Chinese Demand
– Deposit Bail In Risk as Spanish Bank’s Stocks Crash
– Terrorist attacks see Gold Stay Firm
– Trust in the Bigger Picture, Trust in Gold
– Trump, UK and the Middle East drive uncertainty
– Is China manipulating the gold market?
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– Bitcoin volatility and why it’s good for gold
– Silver Bullion In Secret Bull Market
– Should I Invest My Fortune in Gold? Inaugural Lecture by Dr Brian Lucey
Access Award Winning Daily and Weekly Updates Here

Mark O'Byrne

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