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Just over one-quarter of the central bank’s gold reserves held in New York and Ottawa had been shifted to London between March and August, DNB said Wednesday.
The transferred gold is now stored with the Bank of England because gold stored there must meet international trade standards and is recognized as “the world’s most easily tradable gold,” DNB said, adding that the move strengthens its “crisis preparedness.”
By contrast, DNB said the gold bars held in the U.S. and Canada could not be utilized as quickly and directly in a crisis situation.
“With this relocation, we have improved the tradability of our gold reserves. We expect that we will never need to use them, but we do need to strengthen our resilience and preparedness,” DNB Governor Olaf Sleijpen said in a statement.
The move comes amid a blockbuster rally in gold prices and continued U.S.-Iran geopolitical tensions over the strategically vital Strait of Hormuz, with a comprehensive settlement agreement far from certain.
The price of gold, which is typically considered a safe-haven asset at times of financial uncertainty, has jumped nearly 25% over the past 12 months. The yellow metal is currently trading at $4,429.61 per ounce, up nearly 1% for the session.
Bank of France Governor Francois Villeroy de Galhau said at the time that the move was not politically motivated.
In light of the latest transfer, DNB said the geographical spread of its gold reserves was “more balanced,” with London now holding 32.1%, the central bank’s cash center in Zeist in the Netherlands holding 30.8% and New York and Ottawa holding 18.5%, respectively.
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