Great Britain on a par with Albania:
Body warns about UK's gold holdings
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THE UK's gold holdings will drop to a mere 7% of its gross gold and foreign exchange reserves, putting it on par with Albania, once it has completed its programme of gold auctions, the World Gold Council has warned.
This follows the latest, rather unsuccessful, UK gold auction last week. The auction, the seventh so far, was not well subscribed, with the UK government selling 25 tons of gold at 279,95/oz, more than $3 below that morning's gold fix.
The UK plans to sell 415 tons of its central bank gold holdings, leaving it with 300 tons. The UK government has said this will result in gold making up 20% of its net reserves. However, World Gold Council head of research Gary Meade says this description is deceptive, since gold is generally measured as a proportion of gross, not net reserves.
Before the auctions began, gold made up 16% of the UK's gross reserves, roughly in line with the global average for central bank gold holdings. After the auctions, this will fall to 7%.
Mead said the Swiss National Bank's plan to sell about 125 tons of gold before the end of September was unlikely to disrupt the gold market.
In contrast to the UK, Switzerland has been selling its gold via the Bank for International Settlements about 20 tons so far.
It intended selling a total of 1300 tons, just more than half its gold reserves, but Mead said this might already have been factored into the gold price.
It is unclear, however, what the Swiss government plans to do with the proceeds of its gold sale. Plans to set up a global charitable fund the Solidarity Foundation seem to have dissipated. |
