Tag Archives: ABN AMRO

Did ABN AMRO Default On Its Gold Obligations?

On April 1, 2013 ABN AMRO sent a letter to its gold account clients that stated ABN AMRO would no longer offer physical delivery of precious metals.

ABN AMRO gold obligations custodian default

Because I’m Dutch (the letter is also in Dutch), this looked like a default. The translation:

Changes in the handling of orders in precious metals

From April 1, 2013 ABN AMRO has a new custodian for the precious metals gold, silver, platinum and palladium. This is why we will change the way we handle and administer your investments in precious metals. In this letter you can read all about it.

What’s gonna change?

Because of the switch to the new custodian from April 1, 2013 the following things are gonna change for you:

– You can no longer let us make physical delivery of your precious metals investment account.

– Do you submit your precious metals orders via the ABN AMRO investment account? Than the payment for your orders from now on will be at the bid or ask prices that are valid on the market for precious metals. So no longer based on the mid-price, as you were used to.

  • The bid price is the price that traders are willing to pay for the precious metals that is offered for sale, when you sell.
  • The ask price is the price that traders want for selling the precious metals.

– We will valuate the positions in your investment account on precious metals from now on these bid prices.

You can read more on investing in precious metals in chapter 4 of the prospectus (additional conditions for investing in precious metals). You will find these conditions on abnamro.nl/voorwaardenbeleggen

What do I have to do?

You don’t have to do anything. We will take care for the changes in the way your investments in precious metals are handled and administered.


If you have any further questions about this letter you can all our Investment Servicedesk 0900-1474 (from abroad + 31 76 5491755). You can reach us monday to friday from 8:00 – 18:00.

If you would like to submit orders or if you have other questions regarding investing, you can call with your advisor or the Wealth Advice desk at 0900-9215 (from abroad +31 10 2407004). Our employees at the Wealth Advice desk can be reached monday to friday from 7:00 – 22:00 and saturday and sunday from from 9:00 – 17:30.

We are pleased to help you.

Kind Regards,



After the letter was published the entire gold space exploded and the default of ABN AMRO on its gold obligations was taken for granted by many.

In recent months I stumbled on some sources saying that was not exactly what happened. Why not? I asked myself, it said so in the letter. No physical delivery is no physical delivery. Just to be sure I decided to give ABN AMRO’s press division a call yesterday for more information. They were familiar with the subject I was inquiring for, and could tell me a lot right away. The details they didn’t have at hand they sent me in an email the same day. This is the official story:

Prior to the fusion between ABN AMRO and Fortis bank in 2010, the European Commission required ABN AMRO to sell its subsidiary HBU (Hollandse Banken unie). HBU had always been ABN AMRO’s custodian and facilitated physical delivery for precious metals accounts. In 2010 HBU’s activities were sold to Deutsche Bank; this ended the HBU name. What happened in 2013 was that Deutsche bank announced that it would cease the activities, prior serviced by HBU, in The Netherlands because they wanted to get rid of the small traders. Consequently ABN AMRO was stuck without a division for physical delivery – by the way, something that very rarely occurred, according to ABN AMRO. The new custodian for ABN AMRO’s precious metals accounts became UBS in Switzerland. Because physical delivery rarely occurred, ABN AMRO decided not to provide this service to its customers anymore, however, clients could/can take physical delivery from Switzerland if they arrange transport themselves. Hire a transport company or drive to Zurich and back up the truck. When I asked if the accounts at UBS were allocated or unallocated, ABN AMRO replied that 80 % was allocated.

This is the translation of an email they sent me yesterday:

ABN AMRO has two accounts at UBS in Zurich. One is allocated and the other account is unallocated, the unallocated account is necessary because this facilitates buying and selling of gold (of course you can’t trade allocated gold). The allocated account is now about 80% of the gold stock. We manage these accounts ourselves.

We switched to UBS because the conditions of storage at Deutsche Bank changed to the detriment of ABN AMRO customers and we found a better partner in UBS. The halt in physical delivery (April 2013) had therefore only to do with the distance between Zurich and the Netherlands, which made cost-effective delivery just not feasible.

Jeroen van Maarschalkerweerd | Senior Press Officer | Press & PA | Communications & Sustainability

Just wanted to give you another angle on this story. All it took me was one phone call, one email and some surfing on the web. As of yet I haven’t heard any ABN AMRO gold account holder complain he couldn’t get his physical gold out of Switzerland. If I do, I will surely report on it.

ABN AMRO: Gold’s Safe Haven Status Should be Revised

I think most of you remember the Dutch bank ABN AMRO. Last month they came out with an analysis titled: It’s Not All Gold That Glitters.

I present the translation, from which you can read ABN AMRO is trying to change thousands of years of history by saying gold’s safe haven status should be revised, all because the price of gold did not behave as they expected in recent years. An interesting read from a paralel universe.

It’s Not All Gold That Glitters


In uncertain times investors seek safety in gold, but gold isn’t the safe haven it used to be, according to experts.

The volatility in the price of gold is getting a lot of attention from investors world wide, more than ever. Janet Yellen, chairman of the Federal Reserve, said last year to have no insight in the fluctuations. According to Yellen there is no economic model that explains why the price of gold goes up or down. The precious metal appeals to the imagination for decades. It’s scarce, immortal and is een globally as valuable. A safe haven for people that fear currencies and stocks will drop in value or political and economic problems. Different from other commodities the supply of gold is less important for its price. The majority of all the gold ever mined is still in circulation. For example in the form of coins and jewelry. Owners can bring gold relatively easy back in circulation. The price of gold is mainly determined by demand.

By rising demand in times of uncertainty the price of gold will rise. The price goes down if trust in financial markets increases and investors sell gold. This was how it worked before the financial crisis. At this moment the direction of the gold price is extremely unpredictable.

Georgette Boele, precious metals specialist at ABN AMRO, closely follows this market. On behalf of the bank she presents her analysis: “At the hight of the crisis – in 2008 – the gold price tumbled, although sentiment in financial markets was very negative.” The same happened last year. The price of gold fell the most since the 80’s on disappointing economic figures from inter alia emerging markets. “De link between stock market volatility and the price of gold is no longer self-evident”, Boele explains. The status of gold as the ultimate safe haven should be revised, according to specialists.

Were Is The Price Of Gold Headed

An important task of Georgette Boele, precious metals specialist at ABN AMRO, is to map all factors that can influence the price of gold. For investors who like to use gold as potential safe haven, as for investors who prefer to speculate on short term price movements. It’s all about estimating the effects of economical and political developments on the price of gold.

Boele: “ABN AMRO expects the price of gold to drop in 2014 and 2015. A consequence of positive sentiment in the US stock market and the expectation the interest rate in the US will rise as well as the value of the US dollar. In 2016 the balance between supply and demand will change in favor of gold and the price will then recover.”


Boele sees multiple reasons which can explain why the price of gold is moving differently than in the past. “A major factor is the increased accessibility in the gold market for investors.” Until 2004 the price was mainly set by physical gold trade by investors and the gold price in the professional market. “The introduction of ETF’s (exchange traded funds or indextrackers) changed the influence on the price of gold significantly. ETF’s can be traded on a daily basis”, according to Boele. “The liquidity increased and investing in gold became more easy, also for speculators”. The speculators have a different incentive than gold buyers that aim to possess gold as a safe haven in uncertain times. “This became clear at the hight of the credit crisis in 2007 and 2008. The speculators had a shortage in liquidity and were forced to sell ETF’s and other gold financial products. As a consequence the price of gold dropped in times of economic uncertainty.”


Also developments in emerging markets were important. Gold plays an important role as a commodity for jewelries and a safe haven. Boele: “People in emerging markets are more likely to buy gold to protect themselves against currency devaluation. These people have experienced hyperinflation not so long ago.” We can also see gold investment rising if other markets are under pressure. Recent research pointed out that when Chinese real estate goes down, gold demand goes up.” Demand for gold in emerging markets is also influenced by the jewelry market. The size of this market puts an important floor under the price of gold. Gold is a common gift at marriages in India and at new year celebration in China. According to a recent study from HSBC, India, China, Indonesia, Vietnam, Hong Kong and Taiwan make up 60 % of global demand for physical gold. Although the amount of total imported gold is decreasing. Boele: “The cause is the import duty on gold in India, traditionally the largest gold importer. The government implemented this measure to decrease India’s trade deficit. Because of the import duty India has imported significantly less than in previous years. The import duty will not be revised as India needs to control their trade deficit.” Chinese demand for gold wil not have an impact on the price, Boele expects. In the past years Chinese demand was strong, especially in 2013, however, slowing growth will most likely cause Chinese demand to drop.

Various Investment Possibilities In Gold    

There different instruments to invest in gold. For example futures, mining stocks and funds that invest in a basket of commodities. “The choice determines the riks and yield of the investment”, says Martijn Storsbergen, investments director ABN AMRO MeesPierson. He advices his customers to match their investments to their risk profile. “Choose a fund that invests in multiple commodities.”