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Neck and Neck: Russian and Chinese Official Gold Reserves

Note: This article has now been updated to reflect the fact that during September 2017, the Bank of Russia added a further 1.1 million ounces of gold (34 tonnes) to its gold reserves. This information was released by the Bank of Russia on Friday 20 October.

Official gold reserve updates from the Russian and Chinese central banks are probably one of the more closely watched metrics in the gold world. After the US, Germany, Italy and France, the sovereign gold holdings of China and Russia are the world’s 5th and 6th largest. And with the gold reserves ‘official figures’ of the US, Germany, Italy and France being essentially static, the only numbers worth watching are those of China and Russia.

The Russian Federation’s central bank, the Bank of Russia, releases data on its official gold holdings in the Bank’s monthly “International Reserves and Foreign Currency Liquidity” report which is published towards the end of the third week of each month, and which confirms gold reserve changes as of the previous month-end.

The Chinese State releases data on its official gold holdings via a monthly “Official Reserve Assets” report published by the State Administration of Foreign Reserves (SAFE) that is uploaded within the Forex Reserves pages of the SAFE website. This gold is classified as held by the Chinese central bank, the People’s Bank of China (PBoC). The SAFE report is published during the 2nd week of each month, reporting on the previous month-end.

In both reports, official gold reserves (i.e. monetary gold) are specified in both US Dollars and fine troy ounces. Monetary gold is gold that is held by a central bank or other monetary authority as a reserve asset on a central bank’s balance sheet.

Delta: 63 Tonnes

For the Bank of Russia, its latest report, published on 19 September 2017 addressing August month-end, shows the Bank holding 57.2 million fine troy ounces of gold (1779 tonnes). For the Chinese State, the latest SAFE release is reporting Chinese official gold reserves of 59.24 million ounces (1842 tonnes).

Russian gold reserves, as officially reported, now total 1779 tonnes, and are now just 63 tonnes shy of the ‘official’ gold reserves of the Chinese central bank. Given that the Bank of Russia is expected to add about another 36 tonnes of gold to its official reserves during the remainder of 2017,  then if the Chinese State does not reveal any increase in its ‘official’ gold reserves between now and the first quarter of 2018, Russia will most likely surpass China in terms of official gold reserves by April 2018.

While its possible and probable that the Chinese State / PBoC really holds more gold than it claims to hold, any upcoming scenario in which the Bank of Russia surpasses the People’s Bank of China in terms of gold holdings would at least be symbolic in terms of international monetary developments, and would be sure to generate some chatter in the financial press.

Although the official gold reserves of these two key nations are now nearly neck and neck, there are still some interesting contrasts between them, not least the way in which the Bank of Russia’s reported gold holdings have been steadily increasing month on month, while the reported gold holdings of the People’s Bank of China have remained totally unchanged for nearly a year now, since the end of October 2016.

Therefore the situation which is now emerging, i.e. the distinct possibility that Russian official gold reserves will surpass those of China something in early 2018, is a situation which is emerging precisely because the Russian Federation keeps adding to its gold reserves, while the Chinese State seemingly does not.

Differing Styles of Communication

The routes via which these two strategically important nations have amassed their official gold reserves are also quite different, at least at a public reporting level.

Bank of Russia
Bank of Russia Gold Reserves: 2006 – September 2017

It wasn’t so long ago (2007) that the gold reserves of the Russian Federation were still in the region of 400 tonnes. However, beginning in about the third quarter of 2007, the Bank of Russia began a concerted campaign to rapidly expand its official gold holdings, a trend which never subsided and which has been ongoing now for exactly 10 years. By early 2011, official Russian gold reserves had exceeded 800 tonnes. By the end of 2014, the Bank of Russia was reporting holding more than 1200 tonnes of gold. And by the end of 2016, Russian official gold were more than 1600 tonnes. For full details on the Bank of Russia’s gold holdings, including gold storage, gold reserve management, gold purchases and Russian government views on gold, see “Bank of Russia, Central Bank Gold Policies” at BullionStar’s Gold University.

From the above chart, it can be seen that during 2014, 2015 and 2016, respectively, the Bank of Russia added 171 tonnes, 208 tonnes, and 199 tonnes to its gold reserves, or in total 578 tonnes over a 3 year period. In 2017, with the Bank of Russia having added another 164 tonnes of gold for the year to end of August, its official gold reserves now stand at 1779 tonnes.

The route to the Chinese State accumulating 1842 tonnes of gold is a different one to that of the Russians, again at least from a publicly reported angle. While the Bank of Russia has historically published changes to its gold reserves on a monthly basis, the Chinese central bank has chosen to remain very secretive, and between 2001 and mid 2015 had only issued four public updates addressing the size and growth of its gold reserves. These 4 updates were as follows:

  • 4th Quarter 2001: From 394 to 500 tonnes: A 106 tonne increase
  • 4th Quarter 2002: From 500 to 600 tonnes: A 100 tonne increase
  • April 2009: From 600 to 1,054 tonnes: A 454 tonne increase
  • July 2015: From 1,054 to 1,658 tonnes: A 604 tonne increase

Beginning in July 2015, however, the Chinese State started to report changes in its official gold reserves on a monthly basis, and by July 2016 was reporting 1823 tonnes of official gold holdings. The following graphic, taken from a BullionStar infographic on the Chinese gold market, illustrates the sporadic reporting of Chinese official gold reserves between the early 2000s and July 2015. Note that between July 2016 and October 2016, the Chinese State through SAFE reported that the PBoC had acquired another 19 tonnes of gold, taking its total reported gold reserves to 1942 tonnes as of the end of October 2016.

Chinese Official Gold
Chinese Official Gold Reserves, 2003 – 2016 Source: Chinese Gold Market Infographic, BullionStar

The sparse official reporting by the Chinese is also clear in the below chart from the GoldChartsRUS website, which shows cumulative holdings of monetary gold by the People’s Bank of China (PBoC) between 2000 and 2017. Looking at the top panel of the chart, it can be seen that between 2001 and 2015, there were only 4 distinct jumps in the quantity of gold held by the PBoC.

This was followed by a period of about 15 months from July 2015 during which SAFE reported small monthly accumulations in PBoC’s gold holdings, as can be seen from the gradual increases in the bars in the top panel from July 2015 to October 2016, and the corresponding presence of frequent activity in the monthly changes in the lower panel of the chart.

China
Official Gold Reserves of the Chinese central bank: Divulged Holdings 2000 – 2017. Source:www.GoldChartsRUs.com

By September 2016, Chinese State gold reserve holdings had reached 59.11 million ounces. In October 2016, the SAFE report announced that Chinese official gold holdings had reached 59.24 million ounces, a 0.13 million ounce increase from the previous month. However, then something unusual happened, at least in terms of monthly updates. Since October 2016, Chinese official gold reserves have not changed at all. The SAFE updates are still published each month, but the gold holdings figure has remained unchanged at 59.24 million ounces (1842 tonnes).

Therefore, for nearly a year now, the Chinese authorities are signalling that they have not acquired any new gold. At least that is what they want the public to believe. Hence the constantly recurring headlines from the financial media, such as this one from Reuters a week ago, “China gold reserves steady at 59.24 mln ounces at end-September – central bank”.

But is it true that China only holds 1842 tonnes of gold and that it has not been active during the last year in continuing to accumulate monetary gold as part of its reserve assets? And for that matter, is it the case that the Bank of Russia and Russian Federation only hold 1779 tonnes of monetary gold?

While its difficult to know for sure, it is possible that the People’s Republic of China and the Russian Federation both hold additional gold that is not reported by their monetary authorities. This is so for multiple reasons, including the opaque ways in which these monetary gold reserves are accumulated, the traditional secrecy of both governments, and the fact that both countries have access to other investment pools that might hold gold that can be transferred at short notice into the respective central banks’ official gold holdings.

How Much Gold could the Chinese State really have?

The historical track record of the Chinese State in sporadically communicating the size of its monetary gold holdings shows that there has often been a large gulf between the true size of its gold reserves and what the Chinese claimed to have via its piecemeal and rare updates. For example, even based on its official numbers, the PBoC accumulated over 600 tonnes of gold between April 2009 and July 2015 but did not reveal this until July 2015.

The nearly year-long hiatus between October 2016 and the present, during which the Chinese authorities, via SAFE, claim that the PBoC’s gold holdings have remained at 1842 tonnes, could be true, but only in so far as the Chinese State does not wish to inform the world about its sovereign gold reserves. Beyond this, the true gold holdings of the Chinese central bank may be significantly higher than even official published figures suggest.

There is very little transparency into how the Chinese authorities accumulate monetary gold. In July 2015, when SAFE announced the first update to its gold holdings since 2009, it stated that the “major channels of accumulation” of gold were from purchases in foreign markets, domestic gold production, domestic scrap sources, and other transacting in the domestic market. But beyond this, the Chinese authorities never comment on where they source gold from.

There is lots of evidence that the Chinese State purchases significant quantities of gold in the international market, including in the London Gold Market, and then monetises this gold (i.e. classifies it as monetary gold) , before transporting it back to Beijing. See “PBoC Gold Purchases: Secretive Accumulation on the International Market”, at BullionStar Gold University for further details.

The Chinese State is also a possible candidate for having purchased a tranche of the IMF’s gold during IMF gold sales in 2010. See BullionStar blog  “IMF Gold Sales – Where ‘Transparency’ means ‘Secrecy’” for further details.

There are also plenty of other State entities and state controlled entities in addition to the Chinese central bank that could conceivably be holding gold reserves that could in time be reclassified as PBoC gold, and brought into the sphere of reporting. See section “Gold Transfers from other Chinese State entities” in BullionStar Gold University article “Gold Policies of the People’s Bank of China” for further details.

There is also evidence to suggest the Chinese State is really buying about 500 tonnes of gold per year, and that it has a first step target of holding at least 4000 tonnes of gold. This evidence, which is from 3-5 years ago, comes from senior people in the China Gold Association (CGA). See section “How much gold might the PBoC be buying each year?” in article PBoC Gold Purchases.

A gold reserves-to-FX reserves ratio of 5% would currently put Chinese state gold holdings at nearly 4000 tonnes. A gold-to-GDP ratio of about 1.77%, which is the equivalent of the gold-to-GDP ratio of the US, would currently put Chinese state gold holdings at nearly 5000 tonnes of gold.

Russia: Golden Pipelines and Stockpiles

In its “Methodological Notes to International Reserves of the Russian Federation“, the  Bank of Russia defines “monetary gold”  as:

“standard gold bars and coins with a purity of at least 995/1,000 held by the Bank of Russia and the Government of the Russian Federation. It comprises gold in vault, en route and in allocated accounts, including that which is held abroad. The item monetary gold includes unallocated gold accounts with non-residents.”

The primary source of gold flowing to the Bank of Russia comes from Russian gold mining production, with the Russian Federation acquiring a large percentage of domestic gold mining production each year. In practice, a small group of state influenced Russian banks are authorised to intermediate between the gold mining companies and the State, acting as a gold pipeline between the mines and the Bank of Russia / Government. These banks finance the mining companies, purchase their gold output , have it refined into gold bars by Russian gold refineries, and then offer this gold to the Russian State.

Some of these banks include Sberbank, VTB, Gazprombank and Otkritie. For details see section “Russian Banks as bulk buyers of Russian Gold” in the Russian gold market article in BullionStar’s Gold University.

But its possible that some of this gold ends up not with the Bank of Russia, but with other Russian State entities, one of which is the “Gosfund” or “Precious Metals and Gems fund” operated by “The Gokhran”.

This Gosfund could be buying a portion of Russian gold mining output, stockpiling it, and intermittently releasing some of its stockpile to the Bank of Russia. When I asked the Gokhran last year could it reveal its gold holdings, the Gokhran replied to me that “it does not publish information about the amount of gold reserves in the Russian Gosfund nor any data about its precious metal operations.” See letter reply from Gokhran below (for those who can read Russian).

Gok
Gokhran reply January 2016 to query on whether it could publish its Gold Holdings.

Conclusion

Given the high degree of opacity with which both the Russian State and Chinese State accumulate monetary gold, and the fact that they both can probably tap additional gold stockpiles for boosting their official gold reserves, it will be interesting to see whether China, through SAFE, announces any increase in the PBoC’s gold holdings between now and the end of Q1 2018.

Because if China does not do so, the Russian Federation will soon have the distinction of being the world’s 5th largest gold holder, pushing China into 6th place. Will China update its gold holdings before the end of 2017, or at least by early 2018? Nothing is certain, but with an ‘official’ difference of only 63 tonnes of gold between them, the race is on.

Bank of England releases new data on its gold vault holdings

An article in February on BullionStar’s website titled “A Chink of Light into London’s Gold Vaults?” discussed an upcoming development in the London Gold Market, namely that both the Bank of England (BoE) and the commercial gold vault providers in London planned to begin publishing regular data on the quantity of physical gold actually stored in their gold vaults.

Critically, this physical gold stored at both the Bank of England vaults and the commercial London vaults underpins the gargantuan trading volumes of the London Gold Market and the same market’s ‘liquidity’. Therefore, a new vault holdings dataset would be a very useful reference point for relating to London’s ‘gold’ trading volumes as well as relating to data such as the level and direction of the gold price, the volume of gold held in gold-backed Exchange Traded Funds (ETFs), UK gold import and export statistics, and Swiss and Hong Kong gold imports and exports.

The impending publication of this new gold vault data was initially signalled by two sources. Firstly, in early February, the Financial Times (FT) wrote a story claiming that the London Bullion Market Association (LBMA) planned to begin publishing 3 month lagged physical gold storage data for the entire London gold vaulting network, that would, according to the FT:

“show gold bars held by the BoE, the gold clearing banks, and those [vaults] operated by the security companies such as Brink’s, which are also members of the LBMA.”

The “gold clearing banks” are the bullion bank members of London Precious Metals Clearing Limited (LPMCL), namely, HSBC, JP Morgan, ICBC Standard Bank, Bank of Nova Scotia – Scotia Mocatta, and UBS. HSBC and JP Morgan operate precious metals vaults in London. See profile of JP Morgan’s London vault and a discussion of the HSBC vault . ICBC Standard Bank also maintains a vault in London which is operated on its behalf by Brinks.

There are 4 security companies with their own vaults in London, namely, Malca Amit, Loomis, Brinks and G4S. Therefore, including the Bank of England, there are 8 custodians with gold vaults in London that comprise the LBMA gold vaulting network.

The second publication to address the new gold vault data was the World Gold Council. On 16 February, addressing just the Bank of England vaults, the World Gold Council wrote in its Gold Investor publication that:

“The Bank of England is, for the first time, publishing monthly data revealing the amount of gold it holds on behalf of other central banks.”

“The data reveals the total weight of gold held within the Bank of England’s vaults and includes five years of historical data.”

While I had been told by a media source that the London vault data would be released in the first quarter of 2017, at the time of writing, there is still no sign of any LBMA vault holdings data covering the commercial vault operators in London. However, the Bank of England has now gone ahead and independently released its own numbers covering gold held in the Bank of England gold vaults. These gold vaults, of which there are between 8 – 10 (the number fluctuates), are located on the 2 basement levels of the Bank of England headquarters in the City of London.

In an updated web page on the Bank of England’s website simply titled ‘Gold’, the Bank of England has now added a section titled ‘Bank of England Gold Holdings’ and has uploaded an Excel spreadsheet which contains end-of-month gold holdings data covering every month for a 6-year period up to the end of December 2016, i.e. every month from January 2011 to December 2016 i.e. 72 months.

BoE vault
Bank of England ‘show’ gold vault

According to the Bank of England, the data in the spreadsheet shows:

“the weight of gold held in custody on the last business day of each month. We publish the data with a minimum three-month lag.

Values are given in thousands of fine troy ounces. Fine troy ounces denote only the pure gold content of a bar.

We only accept bars which comply with London Bullion Market Association (LBMA) London Good Delivery (LGD) standards. LGD bars must meet a certain minimum fineness and weight. A typical gold bar weighs around 400 oz.

Historic data on our gold custody holdings can be found in our Annual Report.”

Prior to this spreadsheet becoming available, the Bank of England only ever divulged gold vault quantity data once a year within its Annual Report, for year-end reporting date end of February.

You will appreciate that the new spreadsheet, having data for every month of the year, and for 72 months of data retrospectively, conveys a lot more information than having just one snapshot number per year in an annual report. Therefore, the Bank of England has gone some way towards improving transparency in this area.

Before looking at the new data and what it reveals, it’s important to know what this data relates to. The Bank of England provides gold custody (storage) services to both central banks and a number of large commercial banks. Large commercial banks which trade gold are commonly known as bullion banks, and are mostly the high-profile and well-known investment banks.

On its gold web page, the Bank highlights this fact – that it provides gold custody service to both central banks and commercial banks:

“We provide safe custody for the United Kingdom’s gold reserves, and for other central banks. This supports financial stability by providing central banks with access to the liquidity of the London gold market.

We also provide gold accounts to certain commercial firms that facilitate access for central banks to the London gold market.”

In the London Gold Market, the word “liquidity” is a euphemism for gold loans, gold swaps, and gold trading including gold sales. This reference to central banks accessing the London Gold Market as being in some way supportive of ‘financial stability’ is also an eye-opener, since reading between the lines, the Bank of England is conceding that by accessing the London Gold Market’s “liquidity” via bullion banks, these central bank clients are either contributing to direct stabilisation of the gold price in some shape or form, or else are using their gold operations to raise foreign currencies for exchange rate intervention and/or system liquidity. But both routes are aiming at the same outcome. i.e. stability of the financial system.

At the end of the day, the gold price has always been a barometer that central banks strive to keep a lid on and which they aim to stabilise or smoothen the gyrations of, given that the alternative – a freely formed and unmanipulated gold price – would thwart their coordination of fiat currency exchange rates, interest rates and inflation targets.

Interestingly, in addition to the new spreadsheet of gold holdings data, the Bank of England gold web page now includes a link to a new 1 page ‘Gold Policy’ pdf document, which, looking at the pdf document’s properties, was only created on 30 January 2017. This document therefore also looks like it was written in conjunction with the new gold vault data rollout.

The notion of central banks accessing the liquidity of the London Gold Market via bullion banks is further developed in this Gold Policy document also. The document is quite short and merely states the following:

“GOLD ACCOUNTS AT THE BANK OF ENGLAND

1. The Bank primarily offers gold accounts to central bank customers. This is to support financial stability by providing central banks with secure custody for their gold reserves and access to the liquidity of the London gold market (particularly given the Bank’s location).

2. To facilitate, either directly or indirectly, access for central banks to the liquidity of the London gold market, the Bank will also consider providing gold accounts to certain commercial firms. In deciding whether to provide an account, the Bank will be guided by the following criteria.

a. The firm’s day to day activities must support the liquidity of the London gold market.
b. Specifically, the Bank may have regard to a number of factors including but not limited to: evidence of active or prospective trading with a central bank customer; or whether the firm has committed to honour buy and sell prices.

3. Access to a gold account remains at the sole discretion of the Bank.

4. The Bank will review this policy periodically.”

The Vault Data

Nick Laird has now produced a series of impressive charts of this new Bank of England data on his website GoldChartsRUS. Plotting the series of 72 months of gold holdings data over January 2011 to December 2016 yields the below chart.

BOEGoldReserves01t
Bank of England custodial gold holdings: January 2011 – December 2016. Source www.GoldChartsRUS.com

On average, the Bank’s vaults held 5457 tonnes of gold over this 6 year period. The minimum amount of gold held was 4693 tonnes at the end of March 2016, while the maximum quantity of gold held was 6250 tonnes at the end of February 2013.

The overall trend in the chart is downward with a huge outflow of gold bars from the bank’s vaults from the end of February 2013 to the end of March 2016.

As of January 2011, the BoE held just over 5500 tonnes of gold bars in its vaults. Gold holdings rose until the end of August 2011 and peaked at nearly 5900 tonnes before falling to 5600 tonnes at year-end 2011. Overall in 2011, the holdings fluctuated in a 400 tonne range, trending up during the first 8 months, and down during the latter 4 months.

This downtrend only lasted until January 2012, at which point BoE gold holdings totalled about 5450 tonnes. For the remainder of 2012, BoE gold under custody rose sharply, reaching 6200 tonnes by the end of 2012, a level near the ultimate peak in this 6 year chart. The year 2012 was therefore a year of accumulation of gold bars at the Bank during which 750 tonnes were added.

The overall maximum peak was actually 6250 tonnes at the end of February 2013, after which a sustained downtrend evolved through the remainder of 2013. By December 2013, gold under custody at the Bank of England had fallen to 5670 tonnes, creating an overall outflow of 580 tonnes of gold bars during 2013.

The outflow of gold continued during 2014 with another 470 tonnes flowing out of the Bank, leading to end of year 2014 gold holdings of just 5200 tonnes. The outflow also continued all through 2015 with only 4780 tonnes of gold in custody at the end of December 2015. The Bank therefore lost another 440 tonnes  of gold bars in 2015.

Overall, that makes an outflow of 1490 tonnes of gold from the Bank’s vaults over the 3 years from 2013 to 2015 inclusive. This downtrend lingered for 3 more months, with another 80 tonnes lost, which brought the end of March 2016 and end of April 2016 figures to a level of about 4700 tonnes, which is the overall trough on the chart. It also means that there was a net outflow of 1570 tonnes of gold bars from the Bank’s vaults from the end of February 2013 to the end of March / April 2016.

A new uptrend / inflow trend began at the end of April 2016 and continued to the end of November 2016, where gold custody holdings peaked again at about 5123 tonnes before levelling off at the end of December 2016 at 5102 tonnes. Therefore, from the end of April 2016 to the end of December 2016, the Bank of England vaults added 400 tonnes of gold bars.

The gold holdings of the vast majority of central banks have remained stagnant over the 2011 – 2016 period, the exceptions being the central banks of China and Russia. But Russia buys domestically mined gold and stores it in vaults in Moscow and St Petersburg, so this would not affect gold holdings at the Bank of England. China’s central bank, the People’s Bank of China (PBoC), is known to buy its gold on the international market, including the London Gold Market. It then monetizes this gold (classifies it as monetary gold), and airlifts it back to China. But these Chinese purchases don’t show up in UK gold exports because monetary gold is exempt from trade statistics reporting. However, if China was surreptitiously buying gold from other central banks with gold accounts at the Bank of England or buying gold from bullion banks with gold accounts at the BoE, then some of the gold outflows from the BoE could be PBoC gold purchases. But without central bank specific data, its difficult to know.

But what is probably true is that the fluctuations in the quantity of gold stored in the Bank of England vaults are more do to with the gold holdings of bullion banks and less to do with the gold holdings of central banks, for the simple reason that central bank gold holdings are relatively static, or the least the central banks claim that their gold holdings are static. This does not take into account the gold lending market which the central banks and bullion banks go to great lengths to keep secret.

Bank of England custodial gold holdings and US Dollar Gold Price: January 2011 - December 2016. Source www.GoldChartsRUS.com
Bank of England custodial gold holdings and US Dollar Gold Price: January 2011 – December 2016. Source www.GoldChartsRUS.com

There is also a noticeable positive correlation between the movement of the US Dollar gold price and the inflows/outflows of gold to and from the Bank of England vaults, as the above chart demonstrates.

Bullion Bank gold accounts at the BoE

One basic piece of information that the Bank of England’s new vault storage data lacks is an indication of how many central banks and how many commercial banks are represented in the data.

In its first quarterly report from Q1 2014, the Bank of England states that 72 central banks operate gold accounts at the bank of England, a figure which includes a few official sector organisations such as the International Monetary Fund (IMF), European Central Bank (ECB), and Bank for International Settlements (BIS). This number would not have changed much in the meantime, so we can assume that the gold holdings of about 72 central banks are represented in the new data. But the number of commercial banks holding gold accounts at the Bank of England is less clear-cut.

The 5 gold clearing banks of the LPMCL all hold gold accounts at the Bank of England. Why? Because it says so on the LPMCL website:

“Each member of LPMCL has vaulting facilities under its control for the storage of gold and/or silver, plus in the case of gold bullion, account facilities at the Bank of England, which have contributed to the development of bullion clearing in London.”

The LPMCL also states that its clearing statistics include:

“Transfers over LPMCL Clearing Members’ accounts at the Bank of England.”

Additionally, the LPMCL website states that their

“clearing and vaulting services help facilitate physical precious metal movement logistics, location swaps, quality swaps and liquidity management.”

See BullionStar article “Spotlight on LPMCL: London Precious Metals Clearing Limited” for a full profile of LPMCL.

The Bank of England’s reference in its new ‘Gold Policy’ document to commercial banks needing to be “committed to honour buy and sell prices” is a reference to market makers and would cover all 13 LBMA market makers in gold, which are the 5 LPMCL members and also BNP Paribas, Citibank, Goldman Sachs, Merrill Lynch, Morgan Stanley, Société Générale, Standard Chartered Bank, Toronto-Dominion Bank. But there are also gold trading banks that make a market in gold which are not officially LBMA market makers, such as Commerzbank in Luxembourg which claims to be one of the biggest bullion banks in the world.

So I would say that lots of other bullion banks (of which there about 40 in total) have gold accounts at the Bank of England in addition to the 13 official LBMA market makers.

More fundamentally, any bullion bank that is engaged in gold lending with central banks (the central banks being the lenders and the bullion banks being the borrowers) would need a gold account at the Bank of England. I counted 28 bullion banks that have been involved with borrowing the gold of just one central bank, the central bank of Bolivia (Banco Central de Bolivia – BCB) between 1998 and 2016. Some of these banks have since merged or exited precious metals trading, but still, it gives an estimate of the number of bullion banks that have been involved in the gold lending market. The Banco Central de Bolivia’s gold lending activities will be covered in some forthcoming blog posts.

Bullion banks that are Authorised Participants (APs) for gold-backed ETFs such as the SPDR Gold Trust (GLD) or iShares Gold Trust (IAU) may also have gold accounts at the Bank of England. I say may have, because in practice the APs leave it up to the custodians such as HSBC and JP Morgan to allocate or deallocate the actual physical gold flowing in and out of the ETFs, but HSBC on occasion uses the Bank of England as a sub-custodian for GLD gold (see “SPDR Gold Trust gold bars at the Bank of England vaults” for details), so if some of the APs want to keep their own stash of allocated physical gold in relation to ETF trading, it would make sense for them to have a gold account at the Bank of England.

As to how much gold the GLD stores at the Bank of England and how regularly this occurs is still opaque because the SEC does not require the GLD filings to be very granular, however there is a very close correlation between inflows and outflows from GLD and the inflows and outflows from the Bank of England vaults, as the following chart clearly illustrates.

Gold held in the SPDR Gold Trust (GLD) and custody gold held at the Bank of England: January 2011 - December 2016. Source:www.GoldChartsRUS.com
Gold held in the SPDR Gold Trust (GLD) and custody gold held at the Bank of England: January 2011 – December 2016. Source:www.GoldChartsRUS.com

As gold was extracted from the GLD beginning in late 2012, a few months later the Bank of England gold holdings began to shrink also. This trend continues all the way through 2013, 2014 and 2015. Then as the amount of gold began to increase in the GLD at the end of 2015, the gold holdings at the Bank of England began to increase also. Could this be bullion banks extracting gold from the GLD, then holding this gold at the Bank of England and then subsequently exporting it out of the UK?

Some of it could, but UK gold net exports figures suggest that gold was withdrawn from both the Bank of England vaults and from the ETF gold stored at commercial gold vaults (run by HSBC and JP Morgan), after which it was exported.

BOEGoldReserves07t
Custody gold held at the Bank of England and UK gold imports and exports: January 2011 – December 2016. Source:www.GoldChartsRUS.com

Looking at the above chart which plots Bank of England gold holdings and UK gold imports and exports (and net exports) is revealing. As Nick Laird points out in this chart, over the 2013 to 2015 period during which the Bank of England gold holdings fell by 1500 tonnes, there were UK net gold export flows of 2500 tonnes, i.e. 2500 tonnes of gold flowed out of London gold vaults, so an additional 1000 tonnes had to come from somewhere apart from the Bank of England vaults.

Spot Checks

The new monthly vault holdings data from the Bank of England can now also be compared to the amount of gold reported by the Bank of England in its annual reports. The figures the Bank reports in the annual report are as of the end of February. These figures are only reported in Pounds Sterling, not quantities, so they need to be either converted to USD and divided by the USD LBMA Gold Price on the last day of February, or else just divided by the GBP LBMA Gold Price on that day.

In September 2015, I wrote the article “How many Good Delivery gold bars are in all the London Vaults?….including the Bank of England vaults”. This was followed by an October 2016 update titled “Tracking the gold held in London: An update on ETF and BoE holdings”. Both of these articles aimed to calculate how much gold was actually stored in the entire London gold vaulting network by looking at how much gold was held in custody in the Bank of England vaults and how much gold was held by ETFs in London.

For end of February 2015, the calculated total for gold held at the Bank of England (based on the annual report) came out at 5,134 tonnes. Now the Bank of England data says 5126 tonnes which is very close to the calculation.  For February 2016, the calculation came out at 4725 tonnes.  The new Bank of England data now says  4730 tonnes, so that’s pretty close also.

Conclusion

This new Bank of England data is welcome and the Bank of England has taken a step towards greater transparency. However, it would be more useful if the Bank published a breakdown of how much of this gold is held by central banks and how much is held by bullion banks, along with the number of central banks and number of bullion banks that the data represents. Two distinct sets of data would be ideal, one for central bank custody holdings and the other for bullion bank custody holdings. The Bank most likely would never publish two sets of data as it would show bullion bank gold storage activity for the whole world to see.

While the Bank of England has now followed through with its promise to publish its gold vault holdings, the LBMA has still not published gold vault data for the commercial gold vault providers, i.e. its members HSBC, JP Morgan, ICBC Standard Bank, Brinks, Malca Amit, Loomis and G4S. Where is this data, why is there a delay, and why has it not yet been published?

As a reminder, the Financial Times article in early February said that the LBMA would publish gold vault holdings data that would:

“show gold bars held by the BoE, the gold clearing banks, and those [vaults] operated by the security companies such as Brink’s”

The Financial Times article also said that:

HSBC and JPMorgan, London’s biggest bullion banks, are backing the initiatives by the LBMA to improve transparency.”

With the gold holdings data on the other London vaults still not published, it begs the question, has there been a change of mind by HSBC and JP Morgan, two of the LBMA’s largest and most powerful members?

The vaulting page of the LBMA’s website could also do with an update since currently it erroneously says:

“Reputedly [the Bank of England vaults are] the second largest vault in the world with approximately 500,000 gold bars held in safe custody on behalf of its customers, including LBMA members, central banks, international financial institutions and Her Majesty’s Treasury.”

A holding of 500,000 Good Delivery gold bars is equal to 6250 tonnes. However, according to the Bank of England’s own figure for month end December 2016, the Bank of England only holds 5100 tonnes of gold in custody (408,000 Good delivery gold bars). Therefore, the LBMA is overstating the Bank of England’s holdings by 1150 tonnes, unless, and it’s unlikely, that the BoE vaults have seen huge gold bar inflows in the last 4 months.

US National Archives web site releases diplomatic cables from 1978

The US National Archives and Records Administration (NARA) has just released a new batch of diplomatic cables from the year 1978, which can be searched and browsed via the Access to Archival Databases (AAD) website at http://aad.archives.gov/aad/.

These batches of cables are variously known as “State Department Cables“, “Diplomatic Records” or “Central Foreign Policy Files“, and are now on-line (in electronic format) for the years 1973 -1978 inclusive.

These are the same sets of cables that WikiLeaks uploaded to its web site (https://search.wikileaks.org/plusd/), and which WikiLeaks refers to as “The Kissinger Cables” (1973 -1976) and “The Carter Cables” (1977). However, WikiLeaks has not yet added the 1978 batch of cables to its database, but presumably is in the process of doing so. Take your pick about whether you want to search NARA’s AAD front-end or the WikiLeaks front-end. Both have their advantages.

The State Department Cables from the 1970s contain a lot of material about the role of gold in the international monetary system, and the US Government’s behind the scenes views on gold’s role, so these cables are always worth browsing for anyone who is interested in these topics.

For the 1978 batch, the US National Archives states that:

“We have added the 1978 fully releasable permanent electronic telegram records and withdrawal card records of this series to AAD, for an additional 406,265 new records. The series, popularly known as the State Department Cables or the State Department Telegrams, consists of telegrams between the Department of State and Foreign Service posts.”

Withdrawal cards are records which contain some ‘message attributes’ such as subject, date, from, to, and tag words, but that haven’t been released for various reasons such as the record “may violate the privacy of an individual”.

In addition to the electronic telegrams, the NARA has also added 1978 “P-Reel Index records and withdrawal card records of this series to AAD, for an additional 94,312 new records.” These P-Reel Index records are “an index to microfilmed documents”.

Overall, the Department of State’s Central Foreign Policy Files comprises five types of record, namely, a) electronic telegrams, b) electronic P-Reel indices, c) electronic withdrawal cards, d) microfilmed documents, and e) paper documents. In addition to electronic telegrams, a AAD web site search query can return withdrawal card records and records of indexes to microfilm, but these will not be very useful, unless you want to see brief details of what hasn’t been released, or else identify some microfilm before a visit to the National Archives.

When the 1977 batch of cables was released in March 2014, there was some coverage of the release such as an article by the National Security Archive. For the 1978 batch released this year, I cannot see any coverage of the release so far. Maybe there has been coverage. I just haven’t seen any. The 1977 batch of telegrams consisted of 367,175 records, so the 1978 batch, at 406,265 records, is about 10% larger.

Where are the records prior to 1973?

The National Archives  states that the “Central Foreign Policy Files, created, 7/1/1973 – 12/31/1976” series is “a successor to the following earlier series: “Subject-Numeric Files, 02/01/1963 – 06/30/1973” (ARC Identifier 580618)”,and “Central Decimal Files, 1910 – 1963” (ARC Identifier 302021)”.

However, the Department of State’s central foreign policy file records prior to 1973 are not in electronic format. This is simply because, as NARA confirmed to me a few years ago, “the Department of State did not create records in electronic format before then.”

Where are the records later than 1978?

Before publicly releasing a batch of cables in the AAD database, NARA has to get ‘custody’ of the electronic telegrams and withdrawal cards for a particular year, and then they have to process and screen them. So for example, NARA is probably working on the 1979 cables right now, and possibly also working on the 1980 cables. They probably also have the 1981 cables in the pipeline somewhere, but may or may not have custody of them yet, which is done through something called an ‘accessioning process’.

Carter

The 1978 Cables – A quick look

Here’s a quick look at four of the 1978 State Department cables that relate to gold. All the AAD cables are formatted in capital letters, so likewise, the extracts below are in capital letters. I have added bold and underline to highlight various phases and sentences.

 

CABLE 1. RUSSIAN GOLD SALES VIA SWISS BANKS LIKELY TO TOP 350 TONS

This September 1978 cable was from ‘Warner’ in the US Embassy in Bern, Switzerland, to the Secretary of State in Washington DC, and copied to the Treasury. It discusses Russian gold sales via Zürich and that one European central bank holds gold with Swiss commercial banks.

1. SUMMARY: RUSSIAN GOLD SALES VIA SWISS BANKS EXPECTED TO SURPASS 350 TONS FOR 1978. ALL GOLD DELIVERED BY RUSSIANS IN ZURICH IS 999.9 PURITY. ONE EUROPEAN CENTRAL BANK CURRENTLY HOLDS 27 TONS WITH INDIVIDUAL SWISS BANKS. END SUMMARY

2. SENIOR SWISS BANKER RESPONSIBLE FOR HIS BANK’S GOLD DEPT TOLD FINATT THAT RUSSIAN GOLD DELIVERY VIA KLOTEN AIRPORT ZURICH REACHED 65 TONS IN AUGUST, INDICATING RUSSIAN SALES FOR 1978 WILL LIKELY SURPASS 350 TONS, THE FIGURE HE IDENTIFIED AS RUSSIAN SALES DURING 1977. THE AUGUST FIGURE REPRESENTS AN UPTURN IN SALES FOLLOWING A PERIOD IN EARLY 1978 WHEN RUSSIANS WERE OUT OF THE MARKET. ALL GOLD DELIVERED BY RUSSIANS IN ZURICH IS 999.9 PURITY. HE SAID MARKET ‘SATURATED’ WITH THIS QUALITY GOLD AND IMPLIED THERE IS AND WOULD BE LITTLE MARKET RECEPTIVITY TO GOLD OF LOWER PURITY

3. BANKER SAID IT IS COMMON PRACTICE FOR ALL RUSSIAN GOLD FOR SALE IN THE WEST TO BE PHYSICALLY DELIVERED IN ZURICH, PARTLY OUT OF TRADITION AND PARTLY OUT OF CONVENIENCE OF WORKING SALES THROUGH SWISS BANKS. FOR RUSSIAN GOLD SOLD FOR DELIVERY IN LONDON OR ELSEWHERE THE SWISS BANKS WORK OUT A SWAP WITH THEIR HOLDINGS THERE AND CHARGE THE RUSSIANS A PREMIUM PER OUNCE. BANKER SAID HE HAD ONE FLIGHT PER WEEK TO LONDON TO RE-STOCK BANK’S STORE OF GOLD THERE

4. BANKS ALSO SAID THAT ONE EUROPEAN CENTRAL BANK HAD JUST PURCHASED FROM HIS BANK AN ADDITIONAL SUPPLY OF GOLD, BRINGING THIS PARTICULAR CENTRAL BANK’S HOLDINGS WITH HIM TO 27 TONS

Source: http://aad.archives.gov/aad/createpdf?rid=238006&dt=2694&dl=2009

 

 

CABLE 2. UTAYBA (ABU DHABI) SUGGESTS CURRENCY BASKET FOR OIL PRICING….to include Gold

This March 1978 cable was from ‘Dickman’ in the US Embassy in Abu Dhabi to the Secretary of State in Washington DC, and cc’ed lots of other US embassies in OPEC member countries and US embassies in G-5 industrial nations.

The cable discusses a suggestion by the Abu Dhabi oil minister on an oil price calculation methodology that included gold as well as currencies of industrialised and OPEC members.

SUMMARY: OIL MINISTER UTAYBA HAS PUBLICLY PROPOSED ADOPTION OF NEW BASIS FOR CALCULATING PRICE OF OIL BASED ON WEIGHTED AVERAGE CURRENCIES OF SEVERAL KEY INDUSTRIALIZED STATES, CURRENCIES OF OPEC COUNTRIES WITH LARGE BALANCE OF PAYMENTS SURPLUSES, AND PRICE OF GOLD. US DOLLAR WOULD CONTINUE TO BE CURRENCY IN WHICH OIL PAYMENTS ARE MADE. END SUMMARY.

 1. IN AN INTERVIEW WITH LOCAL NEWSPAPER AL WAHDA OF MARCH 6, UAE OIL MINISTER MANA SAID AL UTAYBA HAS PROPOSED THE FORMATION OF A NEW BASKET OF CURRENCIES TO DETERMINE THE BASE PRICE FOR MARKER CRUDE AND THEREBY PROTECT THE PURCHASING POWER OF OIL REVENUES FOR OIL EXPORTING COUNTRIES WHOSE PRODUCTION EXCEEDS THEIR REVENUE REQUIREMENTS. WHILE STATING THAT IT WAS NECESSARY TO KEEP THE DOLLAR AS UNIT OF PAYMENT, UTAYBA SAID “WE MUST SEPARATE BETWEEN STANDARDIZATION OF OIL PRICES AND MAINTENANCE OF THE PURCHASING POWER OF RETURNS FROM OIL”.

2. ON MARCH 7, I HAD AN OPPORTUNITY TO DISCUSS WITH UTAYBA HIS IDEA OF FOUNDING A NEW BASKET OF CURRENCIES FOR CALCULATING THE PRICE OF MARKER CRUDE. THE IDEA OF A BASKET, OF COURSE, IS NOT NEW AND HAS BEEN DISCUSSED WITHIN OPEC FOR A LONG PERIOD OF TIME. UTAYBA FELT, HOWEVER, THAT GIVEN THE CONTINUED SLIDE OF THE DOLLAR IN RELATION TO CERTAIN OTHER CURRENCIES, HIS PROPOSAL SHOULD BE ENTERTAINED.

3. BASICALLY WHAT UTAYBA HAS PROPOSED IS A COMPOSITE BASKET COMPOSED OF THREE PARTS. THE FIRST PART WOULD BE THE CURRENT VALUE OF CURRENCIES OF MAJOR INDUSTRIALIZED COUNTRIES. HE HAS SUGGESTED THAT THEY WOULD ACCOUNT FOR 70 PERCENT OF THE WEIGHT WITH US DOLLAR ACCOUNTING FOR 15 PER CENT, THE DEUTCHMARK 12 PER CENT, THE BRITISH POUND 10 PER CENT, SWISS FRANC 10 PER CENT, THE JAPANESE YEN 10 PERCENT, THE CANADIAN DOLLAR 7 PER CENT, AND THE AUSTRALIAN DOLLAR 6 PER CENT. THE SECOND PART WITH A WEIGHT OF 20 PER CENT WOULD CONSIST OF THE CURRENT VALUE OF THE SAUDI RIYAL 10 PER CENT, THE KUWAITI DINAR 5 PER CENT, AND THE UAE DIRHAM 5 PER CENT. THE LAST 10 PER CENT WOULD BE CURRENT VALUE OF GOLD IN DOLLARS. UTAYBA SAID HE WAS NOT WEDDED TO THESE PERCENTAGES BUT HAD PROPOSED THEM FOR CONCEPTUAL PURPOSES. CALCULATIONS OF OIL PRICES BASED ON THESE WEIGHTED AVERAGES WOULD BE DONE AT SPECIFIED PERIODS WITHIN CERTAIN RANGES ESTABLISHED FOR EACH ELEMENT TO AVOID RECALCULATION FOR MINOR FLUCTUATIONS.

4. UTAYBA SAID HIS PROPOSAL WAS NOW BEING STUDIED BY UAE FOREIGN MINISTRY AND UAE CURRENCY BOARD SO THAT IT WAS STILL NOT A FORMAL UAE POSITION. HE INDICATED THAT HE WAS NOT SUGGESTING THAT OPEC TAKE ANY PRECIPATE ACTION WHICH COULD HAVE HARMFUL EFFECTS BUT HE THOUGHT HIS PROPOSAL MIGHT IN LONG RUN TURN OUT TO BE A BETTER AND MORE REALISTIC METHOD OF CALCULATING PRICE OF MARKER CRUDE AS CURRENCIES THAT ARE NOW WEAK STRENGTHEN AND CURRENCIES THAT ARE NOW STRONG WEAKEN.

 Source: http://aad.archives.gov/aad/createpdf?rid=82162&dt=2694&dl=2009

 

 

CABLE 3. PRESS CONFERENCE ON US / FRG (FED REP OF GERMANY) MONETARY MEASURES

This March 1978 cable was from ‘Meehan’ in the US Embassy in Bonn, Germany, to the Secretary of State in Washington DC, and the Treasury Department, and also for the attention of the US embassies in London, Brussels, Paris, Tokyo and Rome, as well as the OECD and EEC.

It discusses a press conference that the Germans gave which addresses US dollar weakness at that time and measures to support the US dollar.

 

1. IN A PRESS CONFERENCE ON MARCH 13 FINANCE MINISTER MATTHOEFER AND BUNDESBANK PRESIDENT EMMINGER CONVEYED THE JOINT US/FRG STATEMENT ON MONETARY MEASURES AND REPLIED TO QUESTIONS OF ASSEMBLED JOURNALISTS. IN REPLY TO A QUESTION ON U.S. BORROWING FUNDS ABROAD, FINANCE MINISTER MATTHOEFER SAID THAT THE FRG NEVER REQUESTED THAT THE US BORROW LONG-TERM FUNDS ABROAD TO COUNTERACT THE DOLLAR’S DECLINE. WITH REGARD TO US LOANS DENOMINATED IN DEUTSCHEMARKS MATTHOEFER ADDED THAT SUCH LOANS “WERE NEVER ANTICIPATED AND WERE NOT ASKED FOR FROM OUR SIDE”. HE CONTINUED THAT ”THE QUESTION OF WHETHER GOLD SHOULD BE SOLD OR PURCHASED IS ALWAYS UNDER CONSIDERATION. HOWEVER, UP TO THE PRESENT THERE HAS BEEN NO INSTANCE WHEN GOLD SALES WOULD HAVE BEEN CONSIDERED APPROPRIATE, BUT GOLD SALES ARE A DEVICE AMONG OTHERS WHICH IS BEING HELD IN RESERVE”.

Point 2 not included here.

3. EMMINGER POINTED OUT THAT THERE WERE NO DIFFERENCES OF OPINION BETWEEN THE GERMANS AND THE FEDERAL RESERVE IN DETERMINING WHETHER EXCHANGE MARKET DEVELOPMENTS WERE “CLEARLY DISORDERLY”. EMMINGER WHEN ASKED REFRAINED FROM QUOTING A DEFINITE AMOUNT ON THE USE OF THE SWAP AGREEMENT BY THE U.S. HE SAID, HOWEVER, THAT THE FEDERAL RESERVE HAS USED ABOUT THREE QUARTERS OF ITS LINE AND THAT, IN ADDITION, THERE ARE UNUTILIZED FUNDS IN THE SWAP LINE OF THE TREASURY

Point 4 not included here.

Source: http://aad.archives.gov/aad/createpdf?rid=59591&dt=2694&dl=2009

 

 

CABLE 4. STATEMENT ON MEASURES TO STRENGTHEN DOLLAR

This November 1978 cable was from the Secretary of State in Washington DC to all Diplomatic and Consular Posts.  The cable says, drafted by ‘WIDMAN’ from Treasury, and approved by ‘HORMATS’ from ‘EB’ and also approved by ‘AMSOLOMON’ (Tony Solomon) from Treasury.

The introduction to this cable states that it contains verbatim texts for a statement by Jimmy Carter on 1st November concerning action been taken in the US and abroad to strengthen the dollar. The cable also includes a joint statement by W Michael Blumenthal, Secretary of the Treasury, and William Miller, chairman of the Federal Reserve Board, as well as a FRB press release.

The instructions say that diplomatic and consular posts “should make these materials available promptly to host government authorities wherever interested.

 2. POSTS SHOULD MAKE THESE MATERIALS AVAILABLE PROMPTLY TO HOST GOVERNMENT AUTHORITIES WHEREVER INTERESTED.

ACTIONS HAVE BEEN COORDINATED IN ADVANCE WITH GOVERNMENTS AND CENTRAL BANKS OF GERMANY AND JAPAN AND THE SWISS NATIONAL BANK, ALTHOUGH FULL TEXTS HAVE NOT PREVIOUSLY BEEN MADE AVAILABLE. GERMANS, JAPANESE AND SWISS ARE EXPECTED TO ISSUE CONFIRMING STATEMENTS SIMULTANEOUSLY WITH U.S.ANNOUNCEMENT.

 3. OBVIOUSLY THE WIDER THE DEGREE OF SUPPORT FOR THIS PROGRAM THE MORE SUCCESSFUL IT WILL BE.

Carter’s statement is then quoted, the last parts of which included:

6. “AS A MAJOR STEP IN THE ANTI-INFLATION PROGRAM, IT IS NOW NECESSARY TO ACT TO CORRECT THE EXCESSIVE DECLINE IN THE DOLLAR WHICH HAS RECENTLY OCCURRED. THEREFORE, PURSUANT TO MY REQUEST THAT STRONG ACTION BE TAKEN, THE DEPARTMENT OF THE TREASURY AND THE FEDERAL RESERVE BOARD ARE TODAY INITIATING MEASURES IN BOTH THE DOMESTIC AND INTERNATIONAL MONETARY FIELDS TO ASSURE THE STRENGTH OF THE DOLLAR

8. SECRETARY BLUMENTHAL AND CHAIRMAN MILLER ARE ANNOUNCING DETAILED MEASURES IMMEDIATELY.”

Blumenthal’s and Miller’s statement then follows, the beginning of which includes the following text that list what the coordinated intervention consists of, which includes an increase in US Treasury gold sales:

BEGIN TEXT OF JOINT STATEMENT BY TREASURY SECRETARY W. MICHAEL BLUMENTHAL AND FEDERAL RESERVE BOARD CHAIRMAN WILLIAM MILLER: RECENT MOVEMENT IN THE DOLLAR EXCHANGE RATE HAS NOT ONLY EXCEEDED ANY DECLINE RELATED TO FUNDAMENTAL FACTORS, BUT PLAINLY IS HAMPERING PROGRESS TOWARD PRICE STABILITY AND DAMAGING THE CLIMATE FOR INVESTMENT AND GROWTH. THE TIME HAS COME TO CALL A HALT TO THESE DEVELOPMENTS. THE TREASURY AND FEDERAL RESERVE ARE TODAY ANNOUNCING COMPREHENSIVE CORRECTIVE ACTIONS. IN ADDITION TO DOMESTIC MEASURES BEING TAKEN BY THE FEDERAL RESERVE, THE UNITED STATES WILL, IN COOPERATION WITH THE GOVERNMENTS AND CENTRAL BANKS OF GERMANY AND JAPAN, AND THE SWISS NATIONAL BANK, INTERVENE IN A FORCEFUL AND COORDINATED MANNER IN THE AMOUNTS REQUIRED TO CORRECT THE SITUATION. THE U.S. HAS ARRANGED FACILITIES TOTALLING MORE THAN 30 BILLION DOLLARS IN THE CURRENCIES OF THESE THREE COUNTRIES FOR ITS PARTICIPATION IN THE COORDINATED MARKET INTERVENTION ACTIVITIES. IN ADDITION, THE TREASURY WILL INCREASE ITS GOLD SALES TO AT LEAST 1-1/2 MILLION OUNCES MONTHLY BEGINNING IN DECEMBER

Source: http://aad.archives.gov/aad/createpdf?rid=298578&dt=2694&dl=2009

 

So, the above is just a quick sample of four Department of State cables from 1978 that have recently been released, and that are, at the moment, exclusively accessible via the AAD web site here -> http://aad.archives.gov/aad/