Qatar Central Bank raises gold holdings again –
what’s going on elsewhere? -
Although Qatar has increased its gold holdings 15 fold
in a year there is still little evidence that
the Middle East as a region is increasing its holdings. Elsewhere the picture remains mixed
Author: Rhona O'Connell
Posted: Friday , 13 Jul 2007
LONDON -
It has attracted the attention of the Middle Eastern Press
that the Qatar Government increased its gold holdings
by a factor of fifteen between April 2006 and April 2007.
The central Bank of Qatar is carrying out a reserve
diversification policy and stated last year that the
euro would be one of the alternative currencies into which
it would diversify.
Gold is clearly also another element of this programme,
with the holdings amassed to date amounting to
0.28 million ounces or 8.8 tonnes.
At $650/ounce, these holdings comprise 3.4% of Qatar's
gold+foreign exchange holdings combined.
Based on the latest figures from the International Monetary
Fund, the world average level of gold holdings at the end
of April, at $650/ounce, was 10.4%.
Stripping out the holdings of the supra-national
organisations, then the average holding among
the central banks of IMF members was 13.6%.
Meanwhile in the rest of the Middle East, where it must
be allowed that information is patchy as some member
countries have not reported their gold holding levels
for some time, the IMF reports that gold holdings amount
to 956 tonnes, and have increased by just over eight tonnes
over the twelve months to April, with reactions in holdings
reported from "oil-exporting countries" and a small
increase in Omani holdings.
Middle Eastern holdings overall amount, on the basis of
these figures, to seven per cent of the region's total
foreign exchange holdings.
While it is a matter of record that some Middle Eastern
nations are pricing their oil in euros as part of a
dollar diversification exercise, there is no hard evidence
from the IMF figures that they are, as a region,
increasing gold holdings.
Neither is the other important region with respect to
dollar reserve holdings; the Far East.
There have been regular suggestions that the Chinese
Government, with reserves of over $1.1 trillion, should
raise gold as a component of its foreign exchange in order
to diversify risk.
As the Chinese Government has pointed out more than once,
however, the amount of gold necessary to make a substantial
difference is hugely disproportionate to the size of
the gold market overall and this, therefore,
is not really a viable option.
At present, gold comprises 1.1% of Chinese gold and foreign
exchange combined.
To raise this to the world average of 10%, at current
foreign exchange levels, China would have to
hold 200 million ounces of gold, or 6,220 tonnes.
Current holdings are 19.3 million ounces or 600 tonnes,
a shortfall of 5,620 tonnes.
Given that this comprises more than twice world annual
mine production it is clear that such a policy would
massively distort the gold market -
although the upward impact on the price would mean that
total purchases could not have to be that high.
The same argument applies to the rest of the Far East.
Between them, China, Hong Kong, Japan and South Korea
held $2.42 trillion at the end of April and combined
gold holdings were 44.4 million ounces or 1,380 tonnes.
At $650, this comprised 1.2% of gold and foreign
exchange holdings combined.
The only recorded change in holdings among these nations
was a small reduction of 40,000 ounces from Korea.
Meanwhile over the twelve months to the end of April,
world gold holdings in the official sector fell by
12.4 million ounces or 385 tonnes.
Over that period, sales under the second -
Central Bank Gold Agreement -
amounted to approximately 355 tonnes, leaving a
net 30 tonnes of disposals from the rest of the world,
although over the calendar year, estimated net sales
amounted to just 328 tonnes as the result of marginal
acquisitions from non-CBGA signatories.
These sales wre substantially lower than the 674 tonnes
of net disposals in 2005.
There has been something of a sea-change in official
sector attitudes to gold, with official sector holders
now generally having firmer hands than hitherto, and
with some banks looking to add to their gold holdings.
The numbers are comparatively low, however, and the sector
is likely to continue to be a net seller for some time
to come, albeit at lower levels than in recent years?
China, Hong Kong, Japan and South Korea may chance the
current Gold/$ holding situation from a day to the next? -
Gold Forming Uptrend -
is gold forming an uptrend 2nd bull wave? -
Gold Second wave LT trend started -
of the 5-wave Elliott pattern -
if so isn't now the time to load up on Northgate -
and other gold stocks? -
$6 price target for NGX -
Northgate Minerals Corp. (NGX : TSX)
Estimates upped on new gold & copper prices
Blackmont Capital maintains "buy",
12-month target price is raised to $6.00 -
Imo. Tia.
888c.com
God Bless
investorshub.com
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siliconinvestor.com
investorshub.com
Ps.
Its aproblem with fiatz we know -
we don't no know when all fiatz will be hit? -
but when it start -
EX.
With inflation at officially more than 3,700%
(some economists put it as high as 9,000%),
supermarkets are unwilling to comply,
so a price-control unit has been trying -
to enforce it -
news.bbc.co.uk
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