Koos Jansen
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Koos Jansen
Posted on 17 Jun 2014 by

The Bank Of England Lost 755 Tonnes Of Gold In 2013

The Bank Of England (BoE) just came out with their annual report 2014. In the report it’s stated the BoE is the custodian of 5485 metric tonnes of gold (£140 billion pounds measured February 28, 2014). From the BoE annual report 2014:

The Bank provides custodial services for a range of customers. As at 28 February 2014, total assets held by the Bank as custodian were £594bn, of which £140bn were holdings of gold.

In the BoE’s annual report 2013 it was stated they held 6240 tonnes of gold (£210 billion pounds measured February 28, 2013). From the BoE annual report 2013:

As part of this strategy the Bank also provides custodial services for a range of customers. As of 28 February 2013, total assets held by the Bank as custodian were £699 billion, of which £210 billion were holdings of gold.

(To calculate the tonnage I used a gold price of £1046.719 for February 2013 and £793.931 for February 2014)

According to the BoE they had 755 tonnes less gold in their vaults in February 2014 relative to February 2103 (in contrast to reports the BoE lost 1300 tonnes in 2013). The BoE is a custodian for central banks and the LBMA, the removed gold from the vaults was most likely from LBMA customers. GLD’s gold inventory is vaulted in London, but I’m not positive how much, if any, of their gold is stored at the BoE. GLD’s stock lost 451 tonnes over this period. If everything GLD lost came from their own HSBC vault, and nothing from their sub-custodian the BoE, the gold removed from both GLD and the BoE in total is 1206 tonnes.

However, when we look at UK’s net gold trade over this period (March 2013 – February 2014), we can see 1593 tonnes were exported.

UK Gold Trade 2009 - march 2014

This leaves a gap of 392 tonnes (1593 minus 1201), which had to be supplied by additional LBMA or private vaults in London.

Koos Jansen
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  • Greg

    Hi Koos, I greatly appreciate your work, but could you tell me why have you taken this numbers for gold price and GBPUSD rate?
    Based on http://finance.yahoo.com/echarts?s=gbpusd=x the GBPUSD rate is 1,5168 for 28 February 2013 and 1,6692 for 28 February 2014. And the gold price for 28 February 2013 is 1328 and 1627,57 for 28 February 2014 according to kitco.com.
    Counting with these nubmers the final difference would be around 800 tonnes instead of 487.

    I guess you have used some avarage for the month of February, but why?

    • In Gold We Trust

      “And the gold price for 28 February 2013 is 1328 and 1627,57 for 28 February 2014 according to kitco.com.”

      You probably mean it the other way around. However, If I calculate the difference with your numbers the outcome is 614 tonnes. Where do you get 800 from?

      Yes, I took the monthly average gold price of both Februaries. I’ve sent a mail to the BoE to ask for their exact rates. Until then this is my estimate.

      • Greg

        Yes, I’m sorry, I’ve made a mistake here, and not only this one – I also copied your number for gold price in February 2013. I should wrote: “And the gold price for 28 February 2014 is 1328 and 1578,5 for 28 February 2013 according to kitco.com.”
        Now the result should be 803,05 tonnes.

        When we look how A. Macleod counted his 1 300 tonnes disparity it was because he assumed that the sentence “In our vaults are over 400,000 gold bars” from BoE app means that it’s only little more then 400k bars, so he put 400k into calculations.

        By my estimates for 28 February there were 5472 tonnes of gold in BoE vault. In gold bars it would be 440k, so it’s still “over 400,000 gold bars” as it was written in the app.

        • In Gold We Trust

          Let’s wait with what rates the BoE replies.

          • 1horse

            [[Let’s wait with bait’dbreath wot rates

            theB0E:.. ]]
            .

            ®hetorical
            .

            1Lie
            ®INC
            Rotschild

      • http://goldchat.blogspot.com/ Bron Suchecki

        The Annual Report is as at 28 Feb, and LBMA website gives you a London Fix in GBP, so using that I get a decline of 755 tonnes http://goldchat.blogspot.com.au/2014/06/allocated-gold-at-bank-of-england.html

      • http://goldchat.blogspot.com/ Bron Suchecki

        Annual Reports are based on the prices as at the reporting date, not an average. LBMA website gives you a GBP fix price, no need for exchange rates etc.

        • In Gold We Trust

          Thanks Bron, your approach seems most reasonable. I’ll change my numbers.

  • TrailerTrashPatriot
    • Joshua Roberts

      rhetorical question i take it :)

    • Craig

      Of course they have NO SHAME.
      What needs to happen is this…….some military people with integrity need to focus our drone missiles on these central banks and remove them from the planet.
      Perhaps that would solve the problem.
      And if the surviving vermin bitch and moan just drone strike their homes.
      THEY ARE THE ENEMY, YOU KNOW?

  • Markus M. Müller

    So, first they lost 1300t from Feb to Jun 2013 and finally they “officially” only lost about 500t. This means they bought (leased, swapped…) 800t into their vaults?

    • http://goldchat.blogspot.com/ Bron Suchecki

      That 1300t analysis was flawed because it was based on an approximate figure in a web app. BoE repeatedly use “over 400,000 bars” as just a general statement and not meant as an accurate figure.

  • Joshua Roberts

    show me a another market where shit like this can happen and it doesnt spike prices on stability fear – oh wait, they have systematically hologramized the metals markets

  • Joshua Roberts

    let’s not split hairs over the minutiae of calculation while the theater is on fire.

  • rowingboat

    Given BOE somehow ‘found’ 2800 tonnes between Feb 2005 and Feb 2013 at an average of 350 tonnes per year, the ‘lost’ amount of 755 tonnes in the 12 months since is lower than I expected.
    Net imports into UK were around 3800 tonnes from 2005-2013, so most of these tonnes into the country made their way to BOE vault.
    Conversely however, less than half of the total gold which flowed out of UK in FY14 came from BOE. This may reflect central banks holding on to their gold, indeed continuing their net purchases according to the WGC.
    I would love to know the split between central bank and investor owned gold at BOE.

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