Dutch shift gold to London from U.S. and Canada on geopolitical unrest

Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials This advertisement has not loaded yet, but your article continues below.HomeCommoditiesEconomyDutch shift gold to London from U.S. and Canada on geopolitical unrest'Keeping a larger share of the gold reserves in London strengthens the function of gold as an anchor of trust'Author of the article:Patrick Van Oosterom and Jack RyanThe Dutch Central Bank executed the move by selling approximately 59 tons of gold in New York and buying the equivalent amount in London. Photo by Akos Stiller/BloombergThe Dutch Central Bank has shifted gold reserves worth about US$12 billion from New York and Ottawa to London, citing concerns about increasing global geopolitical unrest.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountBetween March and August, the bank transferred approximately 86 metric tons of gold — more than a quarter of the bullion it holds in the United States and Canada — to the United Kingdom capital. London now holds nearly a third of Dutch gold reserves, the largest share.“With this relocation, we have improved the tradability of our gold reserves,” Dutch central bank governor Olaf Sleijpen said in a statement Wednesday. “We expect that we will never need to use them, but we do need to strengthen our resilience and preparedness.”London hosts the world’s most liquid gold market, where hundreds of billions of dollars’ worth of metal changes hands every week. For this reason, central banks have long used the Bank of England as a custodian for their metal, where it can be quickly sold or bought in large quantities, or lent out to raise dollars.Gold stored at the Bank of England must also meet international market standards for weight and purity, making bars held there readily interchangeable and easier to trade.Bullion held at the Bank of England “is considered the most easily tradable gold in the world,” the Dutch central bank said. “This makes it the quickest for DNB to deploy in a crisis situation.”Central banks have long spread their gold across several countries, balancing the security of domestic storage against the ability to trade or mobilize reserves quickly in major financial centres.But geopolitical tensions are prompting more reserve managers to reconsider where their bullion is kept. A growing share are looking to diversify or repatriate their holdings, according to a recent central bank survey.The Dutch move comes just months after the French central bank sold its bullion reserves held in the U.S. and replaced them with reserves in Paris, an operation it said was intended to bring its gold bars into line with international standards.Germany, which holds the world’s second-largest gold reserves, has long faced calls to repatriate bullion held in New York. The opposition AfD this year tabled a motion in the Bundestag seeking the return of all German gold held abroad, arguing that the Trump administration could use its control over assets stored in the U.S. as a source of leverage over Germany.“Keeping a larger share of the gold reserves in London strengthens the function of gold as an anchor of trust,” the Dutch central bank said.The bank holds 30.8 per cent of its 612.4 tons of gold reserves at its cash centre in Zeist, southeast of Amsterdam.This advertisement has not loaded yet.This advertisement has not loaded yet, but your article continues below.The Dutch Central Bank executed the move by selling approximately 59 tons of gold in New York and buying the equivalent amount in London. More than 27 tons of gold were also physically moved from the U.S. and Canada to Zeist, and a similar quantity of gold was then transferred to London.Preparations to move the gold were not disclosed until the process was completed because it was a matter of vital public interest, Finance Minister Eelco Heinen said in a statement.It’s not the first time the Netherlands has reduced its gold reserves in the U.S. In 2014, the central bank cut the amount stored in New York City from 51 per cent of the total, and repatriated it to the Netherlands. That shift was to align with other central banks that store a larger portion of their gold reserves domestically.New York’s vast stockpile of central-bank gold is largely a legacy of the Second World War and the Bretton Woods era, when European countries moved bullion to the U.S. for safekeeping and later accumulated dollar reserves that could be converted into gold.That stockpile amounted to over 12,000 tons of monetary gold at its peak in 1973, but has since nearly halved.—With assistance from Charlotte Hughes-Morgan.We apologize, but this video has failed to load.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.