Tag Archives: Swiss National Bank

BullionStar quoted in Wall Street Journal article on New York Fed Gold

On August 10, the Wall Street Journal (WSJ) published an article about the Federal Reserve Bank of New York (FRBNY) custody gold and the NY Fed’s gold vault. This vault is located under the New York Fed’s headquarters at 33 Liberty in Manhattan, New York City.

The article, titled “The Fed Has 6,200 Tons of Gold in a Manhattan Basement – Or Does It?”, can be read on the subscription only WSJ site here, but is also viewable in full on both the Fox News Business and MorningStar websites, here and here. It also appeared on the front page of the Wall Street Journal print edition on Friday, August 11.

Wall Street Journal article about the NY Fed stored gold
Wall Street Journal article about the NY Fed stored gold, August 10 2017

The NY Fed offers a ‘custody gold’ storage service to its customers, customers which are exclusively foreign central banks and international financial institutions, except notably, the US Treasury is also a gold storage customer of the NY Fed. The Fed’s gold vault, which is on level E (the lowest level) of its basement area under its downtown Manhattan headquarters, open in 1924, and has been providing a gold storage service for foreign central banks since at least the mid-1920s. Custody gold means that the NY Fed stores the gold on behalf of its customers in the role of custodian, and the gold is supposed to be stored on an allocated and segregate basis, i.e. “Earmarked gold”.

NY Fed stored gold has risen in public consciousness over the last few years arguably because of recent Bundesbank gold repatriation operations from New York as well as also similar gold repatriation from the central bank of the Netherlands. The moves by the Chinese and Russian central banks to actively increasing their gold reserves have also put focus on whether the large traditional central bank / official sector gold holders (such as Germany, Italy and the International Monetary Fund) have all the gold that they claim to have, much of which is supposedly stored at the NY Fed vault.

The main theme of the August 10 WSJ piece, as per the title, is whether the NY Fed actually stores all the gold in the vault that its claims to store, a theme which it introduced as follows:

“Eighty feet below the streets of lower Manhattan, a Federal Reserve vault protected by armed guards contains about 6,200 tons of gold.

Or doesn’t.”

Front Page - Wall street Journal, August 10, 2017
Front Page – Wall street Journal, August 11, 2017: Fed gold article bottom of page

The WSJ article intersperses a number of facts about this custody gold alongside various quotes, and while I cannot speak for anyone else quoted in the article, the quotes could probably best be described as being on the sceptical side of the NY Fed’s official claims.

Since I am quoted in the article, it seems appropriate to cover it here on the BullionStar website. The relevant section is as follows:

‘But “no one at all can be sure the gold is really there except Fed employees with access,” said Ronan Manly, a precious-metals analyst at gold dealer BullionStar in Singapore. If it is all there, he said, the central bank has “never in its history provided any proof.”

Mr. Manly is among gold aficionados who wonder if the bank is hiding something about what it’s hiding.’


Extract from Wall Street Journal article on NY Fed stored gold, August 10
Extract from Wall Street Journal article on NY Fed stored gold, August 10

Let me begin by explaining the basis of my quote.

The only reporting which the New York Fed engages in for the custody gold recorded as being held on behalf of its customers (central banks and official sector organizations) is a single number communicated each month (with a 1 month lag) on Federal Reserve table 3.13 – “Selected Foreign Official Assets Held at Federal Reserve Banks” and listed as “Earmarked Gold”.

See the following link, line item 4 for the latest reporting date of July 2017: https://www.federalreserve.gov/econresdata/releases/intlsumm/forassets20170731.htm

As of the end of July 2017, the Fed reported that it was holding $7.84 billion of “Earmarked Gold” in foreign and international accounts. This amount is a valuation at the official US Treasury / Fed price of gold of US $42.22 per fine troy ounce, and which works out at approximately 5775 tonnes of gold.

Federal Reserve reported Foreign accounts stored gold – Earmarked Gold, July 2017. Source: www.goldchartsrus.com
The reason that this figure differs from the ~6200 tonnes number quoted by the Wall Street Journal is that it doesn’t include 416 tonnes of US treasury gold also claimed to be stored in the NY fed vaults. When the US Treasury claimed quantity is added, the figure comes to 6191 tonnes, hence the WSJ citation of circa 6200 tonnes.

NY Fed Gold – Opacity and Secrecy

Other than that, the Federal Reserve does not publicly communicate any other relevant information or details about the quantity of custody gold bars said to be stored in its vault, and furthermore, the Fed has never in its history publicly communicated any such relevant details or information.

So it is a fact that the Federal Reserve has “never in its history provided any proof” that all the gold it claims is there is really there, hence the quote is factual, and hence the connected quote that “no one at all can be sure the gold is really there except Fed employees with access” is a valid conclusion also.

I have done a lot of in-depth research into the NY Fed gold vault and its customer base, for example, see my articles “The Keys to the Gold Vaults at the New York Fed – Part 1“, and “The Keys to the Gold Vaults at the New York Fed – Part 2: The Auxiliary Vault“, and “The Keys to the Gold Vaults at the New York Fed – Part 3: ‘Coin Bars’, ‘Melts’ and the Bundesbank“, so I have made my conclusion based on that research.

The NY Fed has never provided any of the following:

– details of the names of the central banks and international financial institutions that it claims to hold gold on behalf of

– details of how much gold is held by each customer

– details of whether any of the gold stored in the vault is under lien, claim encumbrance or other title

– details of whether any of the custody gold is lent or swapped

– details of location swaps and / or purity swaps of gold bars between the NY Fed vaults and other central bank or commercial bank vaults around the world

– details of the fact that nearly all of the gold bars supposedly held in the NY Fed vault are a combination of old US Assay office gold bars and low grade coin bars made from melted coins

The NY fed has never allowed the conduct of any independent physical gold bar audits or published any results of its own audits. It has never published any gold bar weights lists (note one weight list for some US Treasury gold bars stored at the NY Fed vault made it into the public domain in 2011 as part of documentation that was submitted to a ‘Investigate the US Gold’ hearing in front of the US House of Representatives Committee on Financial Services. That weight list starts on page 132 of the pdf which can be accessed here.

Mainstream Media Cheerleaders and Detractors

The lack of transparency of the New York Fed as regards the custody gold that it stores for its central bank customers is therefore a valid point. The Wall Street Journal article of August 10 is merely highlighting this valid point. However, predictably this did not stop some mainstream US media critics from denouncing the WSJ article such as can be seen in the following tweet from a CNBC ‘chief economic correspondent‘.

I would wager that this Ben White chap from CNBC has never asked the New York Fed any serious questions about its custody gold, preferring instead to throw around tweets using accusatory language such as ‘lunatics’. But this sort of reaction is par for the course from elements of the cheerleading US mainstream media, who seem to feel an obligation to protect the Fed and the status quo of the incumbent central bank led financial system from any valid criticism.

However, I have asked the NY Fed serious questions about its custody gold.

On February 15 this year, I asked the Central Bank and International Account Services (CBIAS) unit of the Fed’s Markets group to confirm the following:

– the number of central banks and official sector institutions that have gold in storage with the NY Fed in Manhattan.

– the identities of these central banks / official sector institutions that have gold in storage.

– could FRBNY CBIAS / Account Relations provide me with gold bar weight lists for the gold holdings that these central banks and official sector institutions hold with the NY Fed?

As the first query went unanswered, I then resubmitted the query a month later in mid-March. On neither occasion did the Fed respond or acknowledge the request. Realistically, I didn’t expect the NY Fed to answer, since they have track record of being aloof and unanswerable to anyone but their own stakeholders, however, the outcome of the emails has established that the NY Fed does not engage on this issue nor provide any transparency in this area to the public.


I had expected the WSJ article to be a lot longer and more in-depth than it actually was, and to obtain some publishable response from the NY Fed. The WSJ however says in the article that:

“The Fed declined to comment”

The lack of any quotation by the Fed within the WSJ article is a glaring omission, and actually proves the complete lack of cooperation by the Fed on the entire topic of gold bar storage. The WSJ article does say that it filed Freedom of Information (FOIA) Requests with the NY Fed, which again underscores that without FOIAs, the Fed wouldn’t voluntarily reveal anything.

What these Freedom of Information requests actually contained is not, however, even revealed by the WSJ, except hilariously in one passing reference to “a heavily redacted tour guide manual“. Hilarious in the sense that the NY Fed would even see fit to heavily redact a simple tour-guide manual. To quote the WSJ:

‘The Wall Street Journal filed Freedom-of-Information requests with the New York Fed. Among the Journal’s findings, from a heavily redacted tour-guide manual provided by the Fed: Tour guides are informed that “visitors are excitable” and should be asked to “please keep their voices down.”‘

Why doesn’t the Wall Street Journal do a full publication of all the NY Fed FOIA responses that it received and publish them on its website? This at least would be some sort of backup evidence to the published article.

There are a multitude of angles that the Wall Street Journal could cover if it wanted to do a proper investigation into the gold bars supposedly stored in the NY Fed vault below 33 Liberty on Manhattan Island.

For example:

Why did the German Bundesbank take multiple years to transfer back a small portion of the gold that it claimed to have held at the NY Fed vaults, with much of that gold having to be recast / remelted into new bars en route to Frankfurt in Germany. If the gold was allocated and segregated to the Bundesbank account at the NYFed, there would have been no reason for the multi-year transfer delays and no reason to need to melt down and recast any gold bars.

Why did low-grade coin bars start turning up in the NY Fed vaults from 1968 onwards? The only place they could have come from is Fort Knox in Kentucky. The fact that these low-grade coin bars had to be used suggests there was not enough high-grade gold bars (995 US assay office Good Delivery gold bars) to satisfy central bank customer requirements at the NY Fed vault at that times. Some of these coins bars were over time shifted out of the NY Fed vaults and refined into high-grade bars and sent to the Bank of England in London. How much coin bar gold is still in the NY Fed vault.

For the 3 largest claimed gold holders at the NY Fed, which are the Banca d’Italia, the Bundesbank and the International Monetary Fund, and which between supposedly hold at least 4000 tonnes of gold at the NY Fed, there is no way to validate the accuracy of any of these holdings, neither from IMF, Bundesbank or Banca d’Italia sources, nor from the NY Fed. These gold holdings have, on paper, not changed since the early 1970s, but thats over 40 years ago and there is no way to check the accuracy of these 3 holdings which make up the lions share of all the gold supposedly held at the NYFed.

Why is there a tunnel between the NY Fed level E basement gold vault to the Chase Manhattan Plaza level B5 basement gold vault across the street? i.e. Why is a central bank vault linked to a commercial vault run by a commercial bank (JP Morgan Chase)?

Does, or has the JP Morgan / Chase in the past, facilitated the activation of NY Fed stored central bank gold into the commercial gold market via movements of gold bars from 33 Liberty to Chase Manhattan Plaza vaults?

Why is there no mention in the Wall Street Journal article of the NY Fed’s Auxiliary vault which was built in 1963 and its location, and which supposedly stores gold bars in a “wall of gold”. Was this not newsworthy?

Why did the 2004 version of the NY Fed gold vault brochure ‘The Key to the Gold Vault’ state that gold bars “belonging to some 60 foreign central banks and international monetary organizations” were stored at the NY Fed vault, and then the 2008 version of the same brochure had changed this statement to gold “belonging to some 36 foreign governments, central banks and official international organizations”.

Why the drop from 60 customers to 36 customers. I have heard from a very reliable senior ex-NY Fed executive that some central banks were unhappy to keep their gold in Manhattan in the aftermath of 9/11 and wanted it stored elsewhere. You wouldn’t blame then given what happened to the Scotia gold vaults under the WTC 4 on 9/11.

Why does the NY Fed decline to comment for a Wall Street Journal article? Surely this should ring alarm bells at the Wall Street Journal?

New Gold Pool at the BIS Basle, Switzerland: Part 1

In the Governor’s absence I attended the meeting in Zijlstra’s room in the BIS on the afternoon of Monday, 10th December to continue discussions about a possible gold pool. Emminger, de la Geniere, de Strycker, Leutwiler, Larre and Pohl were present.”     

13 December 1979 – Kit McMahon to Gordon Richardson, Bank of England


A central bank Gold Pool which many people will be familiar with operated in the gold market between November 1961 and March 1968. That Gold Pool was known as the London Gold Pool.

This article is not about the 1961-1968 London Gold PoolThis article is about collusive central bank discussions relating to an entirely different and more recent central bank Gold Pool arrangement. These discussions about a second Gold Pool began in late 1979, i.e. more than 11 years after the London Gold Pool had been abandoned. This article is Part 1 of a 2 part series. Part 2 will be published shortly.

These discussions about a new Gold Pool arrangement took place in an era of soaring free market gold prices and in the midst of the run-up in the gold price to US$850 in January 1980.

The discussions and meetings about a new Gold Pool  in 1979 and 1980 and beyond which are detailed below, occurred at the highest levels in the central banking world and involved the world’s most powerful central bankers, some of whose names will be familiar to readers. The aim of these central bank discussions and meetings was to reach agreement on joint central bank action to subdue and manipulate the free market gold price in the early 1980s. Many of these collusive meetings were private meetings between a handful of Group of 10 (G10) central bank governors, and took place in the actual office of the president of the Bank of International Settlements in Basle, Switzerland.

Above all, these central bank meetings show intent. Intent by a group of powerful central banks to manipulate a free market gold price so as to distort free market gold pricing signals. So these documents are timeless in that regard. The documents also illustrate the concern that a rising gold price in the free market creates for senior central bankers, and importantly, also shows that these same central bankers have no qualms, at least from a legal or moral perspective, of intervening to manipulate a gold price when they see it as a threat to their fiat currency monetary system.

The 1961-1968 London Gold Pool was a collusive arrangement between 8 major central banks to attempt to keep a lid on the official gold price at US $35 per ounce. That Gold Pool was instigated at the headquarters of the Bank for International Settlements (BIS) in Basle, Switzerland and monitored at the BIS by the governors of the Pool’s member central banks. However, day-to-day activities of the 1961-1968 Gold Pool were executed by the Pool’s agent, the Bank of England in London. Hence it was dubbed the London Gold Pool. Famously, this London Gold Pool collapsed on Thursday 14 March 1968 when speculative buying in the London Gold Market overwhelmed available Gold Pool supplies from member central banks.

Whereas the members of the 1961-1968 London Gold Pool consisted of the central banks of the United States, United Kingdom, West Germany, the Netherlands, Switzerland, France, Belgium and Italy, the discussions about a new Gold Pool that took place in 1979, 1980 and beyond, involved the very same central banks.

The 1961 -1968 Gold Pool was both a selling syndicate, where the members pooled their gold reserves to intervene in the London gold market, and a buying syndicate where the member central banks attempted to replenish gold that had been used in the gold price capping operations. Similarly, as you will see below, the discussions on a new Gold Pool in 1979 and 1980 involved participant West European central banks which on the whole wished to be able to buy gold for the Pool as well as sell gold from the Pool.

Central to illustrating how the most powerful central bankers in the world colluded to attempt to establish a new Gold Pool are a number of internal documents from the Bank of England which provide a detailed blueprint on the evolution of these collusive discussions at the BIS, as well as providing detailed insights into the thinking of the senior Bank of England executives involved in the meetings. These internal correspondence documents from 1979 and 1980 can be thought of as the equivalent of internal emails in the era before corporate email systems.

As you will see below, so many names of high level central bankers crop up in the discussions and documents, that to provide context, this necessitated some short background summaries on who these people were and what roles they occupied. It is also necessary to provide some brief context on gold price movements during the period under discussion.

Bank for International Settlements - Basle Gold Pool
Bank for International Settlements – Basle, Switzerland – Gold Pool

The Gold Price Run-up during 1979 and 1980

When the London Gold Pool collapsed in mid-March 1968, a two-tier gold market took its place, with the private market gold price breaking higher, while central banks continued to trade gold with the Federal Reserve Bank of New York (FRBNY) and US Treasury at the official price of US$ 35 per ounce. However, in August 1971, Nixon closed this FRBNY / Treasury ‘Gold Window’ by ending the convertibility of US dollar liabilities into gold that had been an option for foreign central banks and foreign governments. This was the birth of the free-floating gold price.

By the end of 1974, the US dollar gold price had soared to $187 per troy ounce. Following this, the next 3 years saw the gold price first trade down to near $100 during August 1976 before resuming its uptrend. Year-end gold prices over this period were in the $135 – $165 range. In 1978, the price again broke to a record high and finished the year at $226 per ounce. See chart below.

Gold Price January 1971 to January 1980

Gold Price January 1971 to January 1980. Source: BullionStar charts

But it was in 1979 that the US dollar gold price really took off, setting record after record. In July 1979, the $300 level was breached for the first time. During October 1979, the gold price then took out $400 for the first time. During December 1979, the gold price hit $500. While these late 1979 price increases were in themselves phenomenal, what then occurred in January 1980 was even more striking, for in the space of a few weeks, the price rocketed up first through $600, then $700, and then through the $800 level before peaking in late January 1980 at a then record of $850 per ounce. See chart below.

Gold Price January 1979 to June 1980
Gold Price January 1979 to June 1980. Source: BullionStar Charts 

The mid-1970s saw a flurry of official gold sales to the market which although strategically designed in part to subdue the gold price, in practice didn’t achieve that goal over the medium term. Between June 1976 and May 1980, the International Monetary Fund sold 25 million ounces (777 tonnes) of gold in 45 public auctions. Between May 1978 and November 1979, the US Treasury sold 8.05 million ounces of high grade gold (99.5% fine) and 7.75 million ounces of low grade gold (90% fine) in 23 auctions to the private market. That’s just over 15 million ounces (466 tonnes) of gold in total auctioned by the Treasury. The last US Treasury auctions were on 16 October 1979 when 750,000 ounces of low grade coin bars were auctioned, and then on 1 November 1979 when the Treasury implemented a variable sales quantity approach and auctioned 1,250,000 ounces of low grade coin bars. On 15 January 1980, the US Treasury Secretary announced an official end of US gold sales.

As the 1980 annual report of the bank for International Settlements noted when reviewing the 1979 gold market:

“The further increase in [gold] supplies was overshadowed by the dramatic rise in the demand for gold which, in the space of little over a year, caused the London market price to increase more than fourfold to a peak of $850 per ounce in January 1980.”

“In addition to its sheer magnitude, last year’s [1979] gold price rise had three other remarkable features: firstly,  it took place against all major currencies, including those whose value had increased most during the 1970s. Secondly, it took place at a time of generally rising interest rates in the industrialised world, one effect of which was to increase the cost of holding gold. Thirdly, it took place at a time when, by and large, the dollar was strengthening in the exchange markets.”

It is against this background of surging  gold prices, pre-existing gold auctions, turmoil in currency markets, slow growth and high inflation, that the first of the collusive Gold Pool discussions took place between September 1979 and January 1980 at the BIS.

Gold Pool Revival

There now follows a series of confidential memorandums and briefings from the Bank of England, the first of which, marked ‘SECRET‘ was an analysis written by the Bank of England’s John Sangster to the attention of the Bank of England’s Christopher McMahon. Documents are in blue text and italics, with bold and underlining added where appropriate. A lot of the text in the documents is self-explanatory and the underlying and bold text just draws attention to sections of particular interest.

Christopher McMahon, known as ‘Kit’ McMahon, was an executive director at the Bank of England from 1970 to 1980, before becoming Deputy Governor of the Bank of England on 1 March 1980. Prior to McMahon’s promotion, Jasper Hollom was Deputy Governor of the Bank of England. Kit McMahon’s full name is Christopher William McMahon, hence he signed his his internal Bank of England memos and correspondence with the initials ‘CWM’.

McMahon left the Bank of England in 1986 to take up the role of Chief Executive and Deputy Chairman of Midland Bank. In 1987, McMahon was also made Chairman of Midland Bank. McMahon left Midland in 1991. Since 1974, Midland Bank had also owned Samuel Montagu, one of the five traditional bullion firms of the London Gold Market. HSBC acquired full ownership of Midland in 1992 after acquiring a 15% stake in 1987 when McMahon was Chairman and Chief Executive of Midland. See profiles of McMahon here and here.

John Sangster’s full name was John Laing Sangster, hence he signed his internal Bank of England memos and analysis with the initials ‘JLS’.

During the 1970s and early 1980s, Sangster was the Bank of England’s foreign exchange and gold specialist. In March 1980, Sangster became one of six newly appointed assistant directors at the Bank of England. To give some idea of the senior level at which Sangster was operating at that time at the Bank, when he was promoted to assistant director in March 1980, two of Sangster’s contemporaries that also made assistant director at the time were Eddie George (gilt-edged operations area) and David Walker (economics area). Sangster retired from the Bank of England in 1982. Eddie George went on to be Governor of the Bank of England from 1993 to 2003. David Walker went on to head a whole host of institutions in the City of London including the chairmanship of Barclays Bank.

The first document which follows was written on 21 September 1979 when the gold price closed at $376.41.



Mr McMahon                                                                                                               Copy to Mr  Byatt           


It is just possible that over the next few weeks some central banks may try to discuss a possible revival of the gold pool. Rather like the sterling credit of June 1976, a number of people could spontaneously be thinking that the time is ripe for some joint action.

The main arguments would be: -

(a) gold is even now so much part of the international monetary system that its present performance is a significant element in general currency instability;

(b) whereas previously the weakness in the dollar had been boosting gold, latterly the strength of gold has itself contributed to the dollar’s renewed weakness;

(c) the market now looks overbought, and there is a need to break the psychology of “the market can only go one way and that is up”. Such an attitude has obvious dangers in any market but given gold’s residual monetary connections, there must be a danger that financial institutions could become over exposed in this area;

(d) a joint demonstration by central banks would be all the more salutary since the market firmly believes that central banks are only interested in putting a floor under the price and that none wishes to stem its rise.

(e) it could flush out more Russian selling

There would obviously be no question of any permanent stabilisation of the gold price, merely at a critical time holding it within a target area.  Such an operation could be mounted alongside the existing US auctions, although it is arguable that these have become too predictable and could, for the time being at least, be better subsumed in a new gold pool arrangement.   As far as I know, nothing has yet been mooted to or by the FRBNY, and if there is no American interest the matter would be dropped.   Nor would others consider the proposal, if there were no provision for the recapture of gold, were the market temporarily mastered.

There is nothing for us to do at the moment but be aware of the potential for discussion.. If the idea got off the ground and given the comparative paucity of our gold holding, it would obviously [page 2] be preferable to ensure that contributions were made in proportion to gold holdings rather than on any other basis.

21st September 1979


The actual memorandum from JLS to McMahon can be seen here: Page 1 and Page 2. The links may take a little while to load first time.

Not surprisingly, as the Bank of England’s gold and foreign exchange specialist, Sangster was privy to the views and conversations of other central banks in this area at that time, for he correctly predicted that a group of central banks were about to embark on discussions about a new Gold Pool.

Sangster also correctly predicted that the European central banks’ preferred structure of the interventions be in the form of a Pool in which the gold used could be recaptured. Notably, Sangster’s assessment of the need for American buyin to the scheme also proved accurate.

It was convention in that day at the Bank of England for internal correspondence to be circulated to the recipients who then read it and added hand-written notes which they signed with their initials before returning the original circulated pages to the author. This was in the time before the advent of corporate email.

Notes on JLS 21 9 79Hand-written note on JLS memorandum to Sangster, 21 September 1979

In the above memorandum, a hand-written note by Kit McMahon signed with the initials CWM at the top of page 1 reads as follows:

Paul Jeanty told me that Zijlstra had told him personally a couple of weeks ago that he would now be in favour of a central bank operation to stabilise the price within a moving band. Leutwiler (frequently) and Clappier have said this to him in the past and he believes (I do not know on what evidence) that de Stryker and Baffi would go along with such a plan. All recognise, however, that Emminger has no disposition to support.

CWM 29/9″

As above, there will be many famous names throughout this article, each of which needs to be briefly profiled so as to add context.

At the time of this correspondence, Paul Jeanty was Deputy Chairman of Samuel Montagu & Co, one of the five bullion dealers in the London Gold Market. Samuel Montagu & Co had been a wholly owned subsidiary of Midland Bank since 1974.

A Who’s Who of Central Bankers

Zijlstra refers to Dr. Jelle Zijlstra, Chairman and President of the Bank for International Settlements (BIS) from 1967 to December 1981. Zijlstra was also simultaneously President of the Dutch central bank, De Nederlandsche Bank (DNB) from 1967 until the end of 1981. Notably, Zijlstra was also Dutch Prime Minister for a short period during 1966-67.

Leutwiler refers to Fritz Leutwiler, Chairman of the Swiss National Bank (Switzerland’s central bank) from May 1974 to December 1984. Leutwiler was also a member of the board of the BIS from 1974 to 1984, and served as President of the BIS  between January 1982 and December 1984, as well as Chairman of the Board of the BIS from January 1982 to December 1984.

De Stryker refers to Cecil de Strycker, Governor of the National Bank of Belgium from February 1975 to the end of February 1982. At that time, De Stryker was also president of the European Monetary Cooperation Fund and then president of the Committee of Governors of the Central Banks of the Member States of the European Economic Community.

Clappier refers to Bernard Clappier, Governor of the Banque de France from 1974 to 1979. Clappier was also vice-governor of the Banque de France from 1964 to 1973.

The reference to Baffi is Paolo Baffi, Governor of the Banca d’Italia from July 1975 until October 1979, and also a board member of the BIS since 1975. Baffi became Vice-Chairman of the BIS in 1988.

Emminger refers to Otmar Emminger, President of the Deutsche Bundesbank from 1 June 1977 to 31 December 1979. Emminger was one of the principal architects of the IMF’s synthetic Special Drawing Right (SDR) in 1969 which was designed to be a competitor of and replacement for gold.

The next document below, from 18 October 1979 contains references to the above people and also references to other important central bankers, so it is best, at this stage, to explain these additional names also.

THE GOVERNOR of the Bank of England - Gordon Richardson. Richardson was Governor of the Bank of England for 10 years from 1973 to 1983, and a non-executive director of the Bank of England between 1967 and 1973. He was chairman of J. Henry Schroder Wagg from 1962 to 1972, and chairman of Schroders from 1966 to 1973. Richardson was also a director of Saudi International Bank in London. Saudi International Bank was formerly known as Al Bank Al Saudi Al Alami when it was incorporated in London in 1975, and is now known as Gulf International Bank UK Limited.

Ciampi refers to Carlo Ciampi. Ciampi was Governor of Banca d’Italia from October 1979 to April 1993, and also Vice-Chairman of the Bank for International Settlements between 1994 and 1996. Notably, Ciampi was also Prime Minister of Italy from April 1993 until May 1994, and President of Italy from May 1999 until May 2006.

Schmidt refers to Helmut Schmidt, Chancellor (head of state) of the Federal Republic of Germany (West Germany) from 1974 to 1982.

Guth refers to Wilfried Guth, Chairman of the Board of Deutsche Bank (the commercial bank) from 1976, and from 1985 Chairman of the Supervisory Board of Deutsche Bank until 1990.

Al Quraishi refers to Abdulaziz Al-Quraishi. Al-Quraishi was Governor of the Saudi Arabian Monetary Agency (SAMA) from 1974 to 1983. He was also Chairman of Saudi International Bank in London from 1987 to 1996, and was on the Board of Saudi International Bank at the same time as Gordon Richardson.

The Americans: Miller, Solomon, Volcker and Wallich

Miller refers to William Miller. Miller was US Secretary of the Treasury from August 1979 to January 1981. Before that, he was chairman of the Board of Governors of the Federal Reserve System from March 1978 to August 1979.

Solomon refers to Anthony Solomon. From March 1977 to March 1980, Solomon was US Undersecretary of the Treasury for Monetary Affairs. In April 1980, he became President of the New York Fed and stayed in that position until the end of 1984.

Volcker refers to Paul Volcker. In August 1979, Volcker took over from Miller as chairman of the Board of Governors of the Federal Reserve System. Prior to that, Volcker was President of the New York Fed from 1975 to 1979. Volcker had also been Undersecretary of the Treasury for Monetary Affairs 1969 to 1974.

Wallich is a reference to Henry Wallich. Wallich was an economist, who among other things, was a member of the Board of Governors of the Federal Reserve System from 1974 to 1986. He was also a member of the Congressional Gold Commission in 1981-1982.

Gold Pool Discussions in Belgrade

This second document below was written by Kit McMahon on 18 October 1979 and addressed to the Bank of England Governor, Gordon Richardson. On 18 October 1979 the gold price closed at $386.84. The reference to Belgrade refers to the annual conference of the International Monetary Fund and World Bank which took place at the beginning of October 1979 at the Sava Center in Belgrade, the capital of the former Yugoslavia. Finance ministers and central bankers from 138 countries attended this IMF annual conference in Belgrade.






Paul Jeanty came to see me this afternoon to report on a conversation be had with Leutwiler the other day in Zurich.

Leutwiler told him that the Americans had come to see him in Belgrade (the whole team of them – Miller, Solomon, Volcker and Wallich).  To Fritz’s great surprise they had asked him whether he might organise a gold selling operation (it was mainly Volcker and Solomon who did the talking).  They had apparently mentioned the possibility of being prepared to sell 10% of official reserves and were apparently prepared to join in themselves.

Fritz had replied that if an operation was mounted, nothing like 10% of reserves would be necessary; but that any gold that he sold he would want to buy back later on at a lower price.  Again to his surprise the Americans had not demurred at this – a very big change from previous attitudes.

Fritz had told Jeanty, what Jeanty already knew, that Zijlstra would be interested; however, apparently Clappier indicated that he was against.   This was a reversal of view which Leutwiler attributed to pressure from the Élysée which was itself influenced by the Germans.   Leutwiler had also said that whereas Baffi had been in favour he had no knowledge of Ciampi’s attitude.

Emminger continued to be strongly against.  Apparently, however, some attempt had been made to persuade Schmidt of the value of this idea. According to Leutwiler, Guth had urged it on him, but Schmidt does not appear to be prepared to oppose the Bundesbank.

There seems to be some disposition among those in favour to believe that OPEC are increasingly concerned that gold is outpacing oil and increasingly prepared to use this as an argument for higher oil prices.   Jeanty asked Leutwiler whether he was sure that Al Quraishi would not rock the boat

Page 2

and start buying if other central banks sent the price down. Leutwiler had assured him that he had often discussed it with Quraishi and that there would be no problem there.   He then apparently gave a very interesting piece of information that Quraishi and Zijlstra are meeting with Emminger in Frankfurt next Tuesday – though not necessarily on this subject. Jeanty suggested it might be a plea to be allowed to diversify.

Finally, according to Jeanty, Fritz had asked if he would be likely to be seeing me, making it fairly clear that he would like the gist of these conversations to get to us.    He knew that our reserves are small but he hoped that we might provide moral backing for an initiative to put pressure on Emminger.

I applied to all this, as I have to similar discussions on previous occasions, in a rather discouraging way, saying that while I disliked the instability of the gold price, I thought it was symptomatic more than causal of currency problems and that their would be a sharp fall if and when Volcker’s policy succeeded.   Moreover, while it would be easy and nice for central banks to force the price down too hard and quickly, thereafter – and particularly when they started buying back, they could well find that they were riding a tiger.

I would have said this to Jeanty whatever my views, but in fact I remain extremely doubtful about the wisdom of any enterprise of this kind – at least divorced from much more wide-ranging agreements about currency stability.   However, I thought the conversation was of interest in a number of ways not least in providing further evidence of the way central bankers will talk to major operators in the gold market. I imagine you might want to have some further conversations on this subject with your colleagues in Basle.


18th October 1979

The above memorandum from McMahon to Richardson can be seen here: Page 1 and Page 2. The links may take a little while to load first time.

The following key points are notable from McMahon’s analysis. Zijlstra, as BIS President and as president of the Dutch central bank was in clear favour of the Gold Pool idea.

At the IMF conference in Belgrade at the start of October 1979, the representatives of the US Treasury (Miller and Solomon) and of the Fed Board of Governors (Volcker and Wallich) approached Fritz Leutwiler, chairman of the Swiss National Bank to discuss coordinated gold sales.

At the time, this was alluded to within the financial media, but only in a very general way and there was no mention of a Gold Pool. On 2 October 1979, the New York Times wrote:

“The United States Government, weighing new plans to stabilize the dollar on exchange markets, suggested today that it might increased the amount of gold it offers at monthly auctions and that it was considering the possibility of internationally coordinated bullion sales.

Anthony M Solomon, Treasury Secretary for Monetary Affairs, said the international effort had been discussed with ‘various’ Government representatives on the fringes of the Belgrade annual meeting of the IMF and World Bank.”

The Americans appear to have had a change of mind by the time they met in Belgrade since they were by then comfortable with the notion of recapturing any gold used in price manipulation operations. i.e. a Gold Pool, but by implication they had previously not been in favour of trying to recapture any gold sold.

Note that Volcker and Miller had also met with Helmut Schmidt and Otmar Emminger in Hamburg on their way to Belgrade when they held a meeting to discuss how best to defend the US dollar on the currency markets.

Bernard Clappier, governor of the Banque de France, was by then less in favour of a Pool due to political pressure from the Élysée, which in this context refers to the French Council of Ministers who meet at the Élysée Palace, home of the French president. But that French reluctance was attributed to influence from the Bundesbank which was itself reluctant to engage in the scheme, but as revealed below, this was more due to the Bundesbank’s desire that the US monetary authorities fix the larger currency / dollar issues of the day in parallel with engaging in any Gold Pool operations.

Volcker Headed back to Washington for FOMC Meeting

During the Belgrade IMF conference, Paul Volcker had unexpectedly and suddenly left Belgrade on Tuesday 2nd October and headed back to Washington. He did this to convene a special secret and previously unscheduled meeting of the Fed’s FOMC which occurred on Saturday 6 October 1979. It was at this meeting that Volcker announced the now famous change in Fed policy that saw it shift its focus to monitoring and managing the volume of bank reserves in the financial system as opposed to trying to micro manage the federal funds rate level, and which ushered in much higher interest rates and a recession in an attempt to rein in inflation.

But there are also some interesting references in the transcripts of that 6 October FOMC meeting and in a transcript of a 5 October FOMC conference call preparatory meeting, that make reference to the discussions on gold that Volcker, Miller, Solomon and Wallich had with their European central banker peers while in Belgrade. In the 5 October FOMC conference call meeting Volcker said:

“Let me summarize some of this by saying that late last week–actually beginning before then but particularly late last week and in the very early part of this week–these markets, by which I mean the gold market very obviously and the foreign exchange markets, were “depressed.” I guess that’s the right word. And the atmosphere was very nervous. I think that has been largely turned around by an expectation that there will be some action.

In its 6 October 1979 FOMC meeting, Volcker makes reference to the soundings which the Americans made in Belgrade with other central bankers:

“The possibility of gold sales has been canvassed up and down. “

“The question has been debated up and down and I think it is essentially unsettled. There is a possibility [of gold sales], particularly if the gold market acts up again, but there has been no firm consensus reached on that point simply because in our mutual discussions some concern was expressed about whether they are effective or not effective over a period of time. They might be effective immediately. But if the gold sales have a nice effect immediately and we test it a little while later and the gold price goes up again, the question arises: Is it confidence inspiring or is it not?

Or is it really better over a period of time just to leave the [gold] market alone? I think that question has to be left on that basis for the time being.”

We will have cooperation, I think, from our foreign partners either on gold or on intervention to the degree that they feel that we have done something here; that is an essential part of setting the stage. We will get that kind of cooperation, I suppose, with the limitations of enthusiasm that are inherent in my earlier comments. I don’t mean to suggest that that type of activity is “out” if we mutually think it is advantageous. On the contrary, it is ‘”in” over a period of time with an appropriate background. But it is not “in” in the sense of announcing an international package of that type this weekend.”


Interestingly, on the same day, 18 October 1979, a former Bank of England executive, George Bolton, rang the Bank of England to relay news about rumoured clandestine gold sales by the US to the Saudis:


THE DEPUTY GOVERNOR                                   Copies to DAHB and JLS

Sir George Bolton rang to say that he had heard from a reasonably reliable source of a story current in both Washington and New York. This was to the effect that the USA were planning to sell 10 mn. ounces of gold in four separate unannounced operations before the end of this year. He said that it was being  undertaken to placate the Saudi Arabians.

P.W.F. Ironmonger,
Governor’s Office
18th October 1979

Sir George Bolton had been an executive director of the Bank of England in the 1950s and a non-executive director of the Bank of England in the 1960s, and is attributed as having playing an important role in the development of the Eurodollar market in London. It is not clear why Bolton was still relaying market intelligence to the Bank of England in 1979. Perhaps he did this on an informal basis for the Governors.

George Bolton view on US selling 10 million ounces of gold to the Saudis

However, it is very interesting that Bolton said that the Americans were selling 10 million ounces (311 tonnes) of gold to the Saudis to placate them, and this ties in with McMahon’s comments to Richardson that “OPEC are increasingly concerned that gold is outpacing oil”, but that Al Quraishi of the Saudi Arabian Monetary Authority (SAMA) “would not rock the boat” and buy gold on the market if a new gold pool was selling, but that at the same time  Leutwiler thought that Al Quraishi and SAMA were eager to “diversify” i.e. reinvest their oil revenues in a more diversified way including in physical gold.

Since the last US Treasury gold auction was on 1 November 1979 for 1.25 million ounces of low grade coin bar gold, were 10 million ounces of gold sold directly to the Saudis out of US gold stockpiles, 10 million ounces which were never reported to the market? Or did the US use another central bank’s gold as part of a gold swap to ‘placate’ the Saudis with? These questions remain unanswered, but its important to remember the gold and oil connection and the importance to which the Western European and US monetary authorities attached to ‘keeping the Saudis happy’. More on these oil and gold connections in Part 2.

First Gold Pool Meeting – 12 November 1979

In the above memorandum dated 18 October 1979 that Kit McMahon sent to Govenror Gordon Richardson about the Belgrade discussions and the establishment of a new Gold Pool, there is a hand-written reply in red pen from Richardson to McMahon written on 4 November 1979, as follows:


Thank you for this interesting note which I read some days ago. I agree with your comment at X at the bottom of Page 2. I will pursue with Fritz at Basle but I wonder if it has not now died. GR 4/11

Fritz refers to Fritz Leutwiler, then Chairman of the Swiss National Bank. X refers to “conversation was of interest in a number of ways not least in providing further evidence of the way central bankers will talk to major operators in the gold market”. A hand-written reply from McMahon to Richardson reads “possible but still worth raising, CWM”.

There is also another handwritten note at the top of page 1 which reads “Copy for November Basle Dossier”.

However, the Gold Pool initiative did not die as Richardson thought it might, for on Tuesday 6 November 1979, Zijlstra called a meeting for the following Monday 12 November to take place at his office at the BIS, and invited the central bank governors of the Bank of England, the Bundesbank, the Banque de France, the Swiss National Bank, the Belgian central bank, and of course, the Dutch central bank which was represented by Zijlstra himself.



Copies to: The Governor, The Deputy Governor, Mr McMahon, Mr Payton, Mr Balfour, Mr Sangster

Dr. Zijlstra telephoned the Governor to say that he is holding a meeting in his room at the BIS at 10:30am on Monday 12th November.   Others invited to attend are de Strycker, Leutwiler, Clappier and Emminger or Pohl.  Dr. Zijlstra said that the subject would be that about which the Governor and he spoke while in Belgrade (possibly gold).”

L.C.W Mayes,
Governor’s Office
6th November 1979

Handwritten on the note was “Basle Dossier“, and the initials GR in red (for Gordon Richard) with the date 8/11.

The last few months of 1979 was a period that witnessed new governors being installed at both the Banque de France and Banca d’Italia and a new president at the Bundesbank. At the Banca d’Italia, Paolo Baffi resigned on 7 October 1979, and Carlo Ciampi (then deputy governor) became governor. At the Banque de France, Bernard Clappier stepped down as governor on 23 November 1979 , and Renaud de La Genière took his place. At the Bundesbank, Otmar Emminger retired in December 1979, and Karl Otto Pohl became President.

This explains why the meeting invitation above says “Emminger or Pohl” because November and December 1979 was a transition time at the Bundesbank between Emminger and Pohl. Pohl only joined the Bundesbank in 1977, first serving as vice-president between 1 June 1977 to 31 December 1979. Pohl then became president of the Bundesbank on 1 January 1980 and remained as Bundesbank President until 31 July 1991.

This adhoc Gold Pool discussion meeting by a subset of G10 central bank governors at the BIS in Basle, Switzerland, was the first of 3 such meetings that took place on 12 November 1979, 10 December 1979, and 7 January 1980, respectively, and variously involved G10 central banker governors Zijlstra, Leutwiler, Richardson, Emminger, Pöhl, McMahon, de Strycker, de la Genière, Clappier, as well as René Larre, the BIS General Manager.

12 Nov meeting small

The Bank of England archives only have a summary of the meeting which took place on 10 December 1979 (which is covered below). The very fact that there is a record of the 10 December 1979 meeting is itself a streak of luck since Kit McMahon attended the meeting that day in the place of Gordon Richardson, since, according to the Governor’s Diary for that day, Richardson had to leave the BIS early on 10 December to return to London in order to attend a meeting with the Prime Minister Margaret Thatcher at 10 Downing Street.

Additionally, when asked for minutes of these 3 meetings from 12 November 1979, 10 December 1979, and 7 January 1980 where the attendees were the above governors, the BIS Archives claimed it did not have such minutes and responded:

“The Gold Pool came to an end in 1968, so I take it that you are referring to meetings of the Gold and Foreign Exchange Committee. We do have some minutes for this meeting, but unfortunately not for the period which interests you.”

Preparing for the 12 November Gold Pool Meeting

Hand-written on the invitation notice for the 12 November meeting is a note from McMahon to Sangster which says: JLS, Can you provide a short brief & factual background and thoughts on the advisability of any form of central bank action?  (see attached note of a conversation with Jeanty)”. [This is the ‘Paul Jeanty came to see me‘ memorandum from above].

Sangster saw this note from McMahon on 7 November and responded as follows (remember that Sangster had read the “Paul Jeanty – Leutwiler” memorandum). Below is the third main document of the series. It was written by John Sangster on 7 November 1979, a day on which the US dollar gold price closed at $382.92.



Mr McMahon                                                                                Copies to: Mr Byatt

(handwritten: ‘Copy to the Governor’)


This heat may be now off this question although on a longer term view gold still looks substantially overpriced, unless oil-producing countries are determined to pre-empt a large proportion of current supplies.

  •                                                 $ per fine ounce
  • End 1974                              almost 200
  • September 1976                almost back to 100
  • July 1978                              through 200
  • July 1979                              through 300
  • October 1979                      through 400

There could obviously be endless argument about when the price was right.   One can perhaps say no more than that 200 was obviously too high at end of 1974, as 100 was too low almost two years later.   If these brackets are omitted, it seems difficult to justify a price over 300 now. I should certainly be reluctant to recommend purchases, other than for the jobbing book, at above this price.

It is largely possible that German opposition to any thoughts of a revived ad hoc gold pool was largely tactical. They did not wish to give the US the excuse for further delay by diverting attention with another attack on symptoms, when a fundamental policy appraisal was under way.   This would be rather like the general opposition to the third sterling balance arrangement in 1976 before the IMF deal was complete.   If this view of the German opposition were correct, the discussion could now revive with more chance of success – particularly as the gold price has become a reflection on currencies in general and not just on the dollar in particular. If it is thought that the US has now got its policy right the action on the gold price could bring the sort of success that would sustain faith while waiting for the important result to come through.   Would such an action be any more than the correction of erratic fluctuations which we all advocate in a greater or lesser degree in currencies, but in a market more notoriously subject to violent swings.

Of course the action might fail when it comes to the other leg of the smoothing operation in that the pool might not succeed in buying back at lower levels all that it had previously sold. That is a risk that would have to be accepted from the outset: there should be no question of chasing the price back beyond the level at which the selling operation started.

Page 2

Given that the US auctions are now discretionary it would obviously be advisable for such sales to be subsumed in any general pool arrangement.

By way of illustration, should we become involved in a G.10 plus Switzerland co-operative endeavour and contributions were clearly in proportion to total gold holdings, our share would be just under 2 7/8%

7th November 1979


The pages of this memorandum from Sangster to McMahon can be seen here: Page 1 and Page 2. The links may take a little while to load first time.

Second Gold Pool Meeting – 10 December 1979

Since there are no records available from the BIS nor elsewhere as to what transpired at the first Gold Pool meeting on 12 November, the best way to glean the thinking from the participants of that meeting is by examining the discussions that took place in the 2nd Gold Pool meeting on 10 December 1979, a meeting for which there is a detailed summary, courtesy of a briefing memorandum from Kit McMahon to Gordon Richardson.


The invitation for the 10 December meeting at Zijlstra’s office at the BIS in Basle was relayed to the Governor’s office at the Bank of England on 6 October 1979 and was, probably not surprisingly for that time, scrawled as a short note on some small blue paper:

The Governor,

President Zijlstra’s secretary rang yesterday to invite you to a meeting he is intending to hold on Monday 10th December from 10.00am. This meeting follows the one held on 12th November. The subject will be the same – gold.

I said I would revert if you were unable to attend.

[Initials illegible]  6/12/79

Gordon Richardson saw and acknowledged this note with his initials GR in red pen on the note, and the date 6/12 – see below.

10 December meeting note

The following document is the fourth main document in the Bank of England series covered here. This document is the briefing letter from Kit McMahon to Gordon Richardson referring to the Gold Pool discussion meeting which took place in the office of the BIS President Jelle Dijlstra on Monday 10 December 1979. This is probably the most important documented featured in Part 1 of this two part article series, since it provides an in-depth insight into one of the collusive Gold Pool discussion meetings which the most powerful central bank governors of the time attended discussing the creation of a syndicate to manipulate down the free market price of gold. On 10 December 1979, the gold price closed at $428.14.

In the meeting document, the name Larre refers to René Larre, General Manager of the BIS. Larre was BIS General Manager from May 1971 to February 1981.

De la Geniere refers to Renaud de La Genière, Governor of the Banque de France from 1979 to 1984.

The other participants at the 10 December meeting were BIS President Jelle Zijlstra, Chairman of the Swiss National Bank Fritz Leutwiler, Bank of England executive director Kit McMahon, outgoing Bundesbank President Otmar Emminger, incoming Bundesbank president Karl Otto Pohl, and Governor of the National Bank of Belgium Cecil de Strycker.



[From McMahon]

To: The Governors               Copies to : Mr Payton, Mr Balfour, Mr Sangster , Mr Byatt  only


In the Governor’s absence I attended the meeting in Zijlstra’s room in the BIS on the afternoon of Monday, 10th December to continue discussions about a possible gold pool. Emminger, de la Geniere, de Strycker, Leutwiler, Larre and Pohl were present.

Larre began by outlining a way in which a possible gold pool might be handled. The BIS could undertake all the operations on behalf of a group of central banks on the basis of rather general criteria which would be reviewed monthly.  The criteria would take into account not merely the developments of the price of gold but the affect any such developments appeared to be having on the dollar.   Thus they would envisage selling only when gold was relatively strong and the dollar relatively weak and buying only in the reverse circumstances.   They thought that they at least might start with a sum of around 20 tons (equals around $300 million at present prices).   They could take running profits of losses on their books for a considerable period and though participating central banks would have to envisage the possibility of an ultimate loss or gain in gold, in practice all that might be involved would be a loss or gain in dollars.    On this point both Zijlstra and Leutwiler emphasised that they were already liable to suffer substantial losses on their dollar reserves and would not be worried by the potential losses that they might they might sustain on this scheme.

In answer to a question from me, Zijlstra confirmed that the US realised that if any gold pool were developed, the European central banks would intend to buy back in due course any gold they sold. He said they were unhappy that the Europeans were not prepared to sell gold outright but they accepted it.    Larre pointed out in parenthesis that Tony Solomon was probably the only American now or in the recent past that would be prepared to accept such a line. He knew that Wallich and probably Volcker was against the whole idea.

Page 2

Zijlstra and Leutwiler said they were both strongly in favour of going ahead on the basis Larre had suggested.   They then asked what the other thought.

Emminger said that he had put this proposition to his Central Bank Council who were unanimously against it.   His hands were therefore at present totally tied.

De Strycker said he was extremely doubtful about the scheme.   He thought it was neither desirable nor necessary and carried considerable dangers.   De la Geniere was also negative stressing the great political dangers for him of selling any French gold in this indirect way.

Leutwiler then suggested that they should do it the other way round:   wait until the gold price went below 400 and then start the operation by buying.   When the BIS had bought, say, 20 tons they would have a masse de manoeuvre which they could then sell.   La Geniere said that this might be easier for him and he would consider the possibility of doing something along these lines. Emminger also said, though without much confidence, that it was possible that if the operation were to start along these lines and if it appeared to be going well, it might be possible to persuade the Central Bank Council to join in.

Leutwiler and Zijlstra then said that although they did not think a very large group was necessary to undertake the operation it probably had to be bigger than Two:    specifically they really needed either the French of the Germans.    Zijlstra said that although he had formal powers to do this he did not wish to do it without carrying his Government with him.    The Government was still doubtful and would probably need to know that a number of other countries were going along with it.

At various points during the meeting there was a discussion about publicity for the operation and at an early point Zijlstra said that publicity was both inevitable and desirable if the operation was to have a maximum effect.    He brushed aside my suggestion that while the publicity for any selling operations would be helpful, that attached to the later (or on the revised scheme, earlier) buying could be rather inflammatory.   However, if the scheme were to be 

 Page 3

simply a BIS one, publicity would not necessarily, or perhaps desirably, arise.   This point was not really addressed in the discussion.

I made a number of sceptical points about the failure of commodity stabilisation schemes of all kinds in the past and the dangers of getting drawn in gradually to bigger and bigger commitments. Leutwiler said that there was no danger because the losses would be small.   I said that I envisaged political dangers.    If it got known that the central banks were involving themselves in the price of gold, however much they said it was only a smoothing rather than a stabilising operation, they would find themselves on a tiger. If the price of gold went on rising they would either have to increase their efforts or add to the upward pressure o gold by pulling out.

None of this carried any weight with anybody except perhaps de Strycker.   In any case I was not asked for any commitment from us.   There was, in fact, no discussion of whether or how contributions to the scheme would be based, but presumably it would be in relation to gold holdings so that they would not expect much from us.

The meeting ended with Leutwiler saying he would approach the Canadians  and Japanese to see how they felt about the idea while Zijlstra would talk to the Italians.   All would then think further about it and revert in January.

I must say I remain personally extremely sceptical about the desirability and efficacy of any scheme along the lines so far suggested.


13th December 1979

The pages of this meeting description from McMahon can be seen here: Page 1,  Page 2 and Page 3. The links may take a little while to load first time.

The Essence of the 10 December Meeting

The following key points are notable from McMahon’s briefing of the 10 December Gold Pool discussions meeting. McMahon opens by stating that the meeting was called “to continue discussions about a possible gold pool“. This proves there was an earlier meeting in November as per the invitation for the November meeting despite the fact that no minutes or summary exist for the November meeting.

Zijlstra and Leutwiler acted as the 2 main advocates of the proposed Gold Pool arrangement. This is important to remember because Zijlstra was the President of the BIS at that time and Leutwiler became President of the BIS at the beginning of 1982 taking over from Zijlstra. So the heads of the BIS in the early 1980s were both firm advocates of the need for a new Gold Pool. Zijlstra and Leutwiler probably also represented the two most independent central banks present at the discussions, namey the Dutch and Swiss central banks.

The following countries were represented at the 10 December meeting: UK, Switzerland, West Germany, France, Netherlands, Belgium. The following central banks were represented at the meeting:

  • Zijlstra – BIS and Netherlands central bank
  • McMahon – Bank of England
  •  Emminger – Deutsche Bundesbank
  • Pohl – Deutsche Bundesbank
  • de la Geniere – Banque de France
  • de Strycker – Belgian central bank
  • Leutwiler – Swiss National Bank
  • Larre – Bank for International Settlements

The fact that Emminger had already put the suggestion to his Central Bank Council implies that this was probably a take-away after the November meeting. According to the Bundesbank 1979 annual report, there were 18 members of the Central bank Council (including Emminger and Pohl).

The market mechanics of the proposals discussed in the meeting are also classic collusive Gold Pool tactics to torpedo the gold price by “selling only when gold was relatively strong and the dollar relatively weak and buying only in the reverse circumstances.” 

The discussion also made it clear that the preferred approach would be to operate as both a selling syndicate and a buying consortium as “European central banks would intend to buy back in due course any gold they sold.” It was even suggested that the buying could occur first so as to create an inventory of physical gold with which to use to fund the selling interventions, i.e “wait until the gold price went below 400 and then start the operation by buying. When the BIS had bought, say, 20 tons they would have a masse de manoeuvre which they could then sell.”

Given that René Larre the BIS general manager began the meeting shows that he was coordinating or spearheading this meeting in his capacity as BIS general manager. It is also very interesting that McMahon states that “the BIS could undertake all the operations on behalf of a group of central banks” that could  be “reviewed monthly”, which underlines the fact that overall, this could be viewed as a BIS led scheme, controlled and operated out of Basle.

A BIS scheme would also allow the Gold Pool to operate in secrecy, out of public view. In the words of McMahon “if the scheme were to be simply a BIS one, publicity would not necessarily, or perhaps desirably, arise“.

Following this 10 December meeting, the governors returned to their respective banks and recessed for Christmas and New Year, returning to Basle in early January where the next Gold Pool meeting took place on 7 January 1980, in a historic month in which the gold price rocket from $515 to $850 in a matter of weeks.


This concludes Part 1 of the series. There is a lot to digest in the above. Part 2 will continue where we left off, and will cover discussions of this new BIS Gold Pool during the period from January 1980 onwards. For now, some quotes from Part 2:

“This is not to advocate gold for oil directly; the price haggling would be too acrimonious. Market intermediation should allow the G10 to move with the price while attempting to control its pace as well as break off the experiment when possible or necessary.”     

- John Sangster to Gordon Richardson, Anthony Loenhis & Kit McMahon, Bank of England, 17 September 1980

“I feel that it is necessary for us, within the Group of Ten and Switzerland, to consider ways to regulate the price of gold, admittedly within fairly broad limits” 

- Jelle Zjilstra, BIS Chairman and President and Dutch central bank President, 27 September 1981


First, there is the meeting on the Gold Pool, then, after lunch, the same faces show up at the G-10″ 

- Bundesbank President Karl Otto Pohl (who only began working at the Bundesbank in 1977) to journalist Edward Jay Epstein, in a conversation at the Bundesbank in 1983

From Gold Trains to Gold Loans – Banca d’Italia’s Mammoth Gold Reserves

Italy’s gold has had an eventful history. Robbed by the Nazis and taken to Berlin. Loaded on to gold trains and sent to Switzerland. Flown from London to Milan and Rome. Used as super-sized collateral for gold backed loans from West Germany while sitting quietly in a vault in New York. Leveraged as a springboard to prepare for Euro membership entry.  Inspired Italian senators to visit the Palazzo Koch in Rome. Half of it is now in permanent residency in downtown Manhattan, or is it? Even Mario Draghi, European Central Bank (ECB) president, has a view on Italy’s gold. The below commentary tries to make sense of it all by bringing together pieces of the Italian gold jigsaw that I have collected.

2,451.8 tonnes

According to officially reported gold holdings, and excluding the gold holdings of the International Monetary Fund (IMF), Italy’s central bank, the Banca d’Italia, which holds Italy’s gold reserves, is ranked as the world’s third largest official holder of gold after the US and Germany, with total gold holdings of 2,451.8 tonnes, worth more than US$ 105 billion at current market prices. Notable, Italy’s gold is owned by the Banca d’Italia, and not owned by the Italian State. This contrasts to most European nations where the gold reserves are owned by the state and are merely held and managed by that country’s respective central bank under an official mandate.

Italy’s gold reserves have remained constant at 2451.8 tonnes since 1999. Although the Banca d’Italia has been a signatory to all 4 Central Bank Gold Agreements and could have conducted gold sales within the limits of the agreements between 1999 and the present, it did not engage in any gold sales under either CBGA1 (1999-2004), CBGA2 (2004-2009), or CBGA3 (2009-2014), and as of now, has not conducted any sales under CBGA4 (2014-2019). With 2,451.8 tonnes of gold, the Banca d’Italia holds marginally more than the Banque de France, which claims official gold holdings of 2,435.8 tonnes.

Gold as a percentage of total reserves for both banks is very similar, with Italy’s gold comprising 69.7% of total reserve assets against 67.2% for France. Similarly, German’s gold reserves, at 3,378.2 tonnes, are 70.1% of its total reserves. See the World Gold Council’s Latest World Official Gold Reserves data for details.

So it appears that the big three European gold holders consider their gold to be a critical part of their foreign reserves and are keeping the ratio of their gold to total reserves within around the 70% mark.

Towards Transparency?

In April 2014, Banca d’Italia published a 3 page report about Italy’s gold reserves titled “Le Riserve Auree della Banca D’Italia” (published only in Italian). The report highlights that Italy’s gold is held in four storage locations, one of which is in Italy.

Specifically, in the report, Banca d’Italia confirmed that 1,199.4 tonnes of its gold, approximately half the total, is held in the Bank’s vaults which are located in the basement levels of its Palazzo Koch headquarters in Rome. The majority of remainder is stored in the Federal Reserve Bank’s gold vault in New York. The report also states that small amounts of Banca d’Italia gold are stored at the vaults of the Swiss National Bank in Berne, Switzerland, and at the vaults of the Bank of England in London.

As to why Italian gold is stored abroad in New York, London and Berne and not in other countries, is explained by historical data, and explained below.

++ Bankitalia: Visco, statuto riafferma indipendenza ++

Palazzo Koch

In its Palazza Koch vaults in Rome, the Banca d’Italia claims to store 1199.4 tonnes of gold. Of this total, 1195.3 tonnes are in the form of gold bars (represented by 95,493 bars), and 4.1 tonnes are in the form of gold coins (represented by 871,713 coins). While most of the bars in Rome are prism-shaped (trapezoidal), there are also brick-shaped bars with rounded corners (made by the US Mint’s New York Assay Office) and also ‘panetto’ (loaf-shaped) ‘English’ bars. The average weight of the bars in Palazzo Koch is 12.5 kg (400 oz), with bar weights ranging from relatively small 4.2 kgs up to some very large 19.7 kgs bars. The average fineness / gold purity of the Rome stored bars is 996.2 fine, with some of the holdings being 999.99 fine bars.

The Banca d’Italia also states that 141 tonnes of gold that it transferred to the ECB in 1999 as a requirement for membership of the Euro is also stored in Palazzo Koch. This would put the total gold holdings in the Palazzo Koch vaults at 1340 tonnes. Gold transferred to the ECB by its Euro member central banks is managed by the ECB on a decentralised basis, and is held by the ECB in whatever location it was stored in when the initial transfers occurred, subject to various location swaps which may have taken place since 1999.

The Vault is revealed

While the Banca d’Italia’s 3 page report appears to be the first official written and self-published confirmation from the Bank which lists the exact storage sites of its gold reserves, these four storage locations were also confirmed to Italian TV station RAI in 2010 when an RAI presenter and crew were allowed to film a report from inside the Bank’s gold vaults in Rome.

This RAI broadcast was for an episode of ‘Passaggio a Nord Ovest’, presented by Alberto Angela.

Translation of Video

For those who don’t speak Italian, such as myself, I asked an Italian friend to translate Alberto Angela’s video report and the other voice-overs in the report. The translation of the above video is as follows:

Banca D’Italia features a secret and extremely important place which represents Italy’s wealth: it’s our gold reserve.

We’ve had a special permission to visit this place, called “the sacristy of gold.” Here there’s a big protected door, and three high personnel from Banca d’Italia who are opening the door for me. Three keys are needed to open the door of the vault, one after the other and operated by three different people. Obviously we can’t show the security systems nor the faces of these men, but the door is huge, at least half a metre, and leads to another gate where again three keys must be used. Past this, that’s where our country’s gold is kept. 

Here we are. It’s exciting to get in here, the environment is simple, sober. [general commentary, then camera shows a large amount of gold]

This is not all the gold we own, as part of it is also stored in The Federal Reserve in the US, in the Bank of England in the UK and in Banca dei Regolamenti Nazionali in Switzerland. I’m speechless when exploring the sacristy, … you don’t see this every day. 

The value of all this gold is established by the  European Central Bank, that also establishes its price. The overall value appears in the end of year balance. In 2005 the gold was valued at 20 miliardi of Euros (billions)

There are three types of lingotti (square-shaped gold). {he says how much the bars weigh}

They feature some signs on them, to say that they have been checked. Some are almost 100% gold, pure gold. There’s also a serial number on the gold, and a swastika on some of them as the Nazi took away all our gold, transferring it first to the north of Italy and then to Germany and Switzerland. At the end of the war part of it came back featuring the Nazi sign.

This gold represents the symbol of our wealth, without this we wouldn’t be able to deal with the rest of the world, it’s a symbol for Italy, a guarantee, like a family’s jewelry. They can be used to get loans as happened when Italy asked for a loan from Germany and they demanded, as a guarantee, the value in gold. So the name Germany was put on this gold at the time.

{the reporter then talks about going from gold to notes and ‘convertibility’ – trust in the States is now the guarantee for exchanges, and not gold, says the voice. It’s a relation of trust … Banca d’Italia keeps an eye on this. After Maastricht, a lot of our gold has left Italy to join the other countries’ gold to create the communitarian reserve of the Euro}”

Note that the reporter, Angela, states that in addition to Rome, the Italian gold is stored at the Federal Reserve Bank in New York, the Bank of England in London, and at the Bank of International Settlements (BIS) in Switzerland. The reporter uses the exact words “Banca dei Regolamenti Nazionali”.

The BIS and SNB

This BIS as Italy’s gold custodian was also confirmed in 2009 by Italian newspaper “La Repubblica”, which published an article about Italy’s gold, stating that it was held in Rome, at the Federal Reserve in New York, in the ‘vaults’ of the BIS in Basel, and in the vaults of the Bank of England.

This apparent inconsistency between a) the Banca d’Italia’s report, which claims that its gold in Switzerland is at the Swiss National Bank (SNB) in Berne, and b) the RAI broadcast, which states that some Italian gold is stored with the BIS in Switzerland, is technically not a contradiction since the BIS does not maintain its own gold storage facilities in Switzerland. The BIS just makes use of the SNB’s gold vaults in Berne.

If you look on its website, under foreign exchange and gold services, the BIS specifically states that it uses ‘Berne’ as one of its safekeeping facilities for gold, i.e. it offers its clients “safekeeping and settlements facilities available loco London, Berne or New York”. Loco refers to settlement location of a precious metals transaction. By confirming that its Swiss storage is with the BIS, and that it also stores gold at the Swiss National Bank in Berne, the Banca d’Italia has, maybe inadvertently, confirmed that the BIS makes use of the Swiss National Bank’s gold vaults, and that the SNB vaults are in fact in Berne. while its knwn that the SNB gold vaults are in Berne, the SNB rarely, if ever, talks about this.

However, in 2008, Berne-based Swiss newspaper “Der Bund” published an article revealing that the SNB’s gold vaults are in Berne underneath the Bundesplatz Square. Bundesplatz Square is adjacent to the SNB’s headquarters at No. 1 Bundsplatz. BIS literature, such as the official BIS history publication “Central bank Cooperation at the Bank for International Settlements, 1930 – 1973” also confirms that the SNB gold vaults are in Berne and that the BIS and the Banca d’Italia have held gold accounts with the SNB in Berne since at least the 1930s. Note that the SNB actually has two headquarters, one in Berne, the other in Zurich at Börsenstrasse.Its quite possible that some of the SNB custodied gold is also stored in the vaults of its Zurich headquarters under Paradeplatz or Bürkliplatz.

Simple Questions met with Ultra-Secrecy

In April 2014, in two emails, I asked the Banca d’Italia’s press office specifically about this SNB / BIS situation, and also about the Banca d’Italia gold stored in New York, (and also about gold leasing – see separate section below). My questions were as follows:

“The Banca dItalia states in its April (2014) gold document that the Italian gold held in Switzerland is stored at the Swiss National Bank in Berne. Previous profiles of the Banca dItalia gold storage arrangements in an RAI TV broadcast in 2010 and in a La Republica newspaper article in 2009 state that the Italian gold in Switzerland is deposited with the Bank of International Settlements (BIS).

Given that the BIS use the SNB vaults in Berne to store gold deposited with them (since they don’t have their own gold storage facilities in Switzerland), then the reference to the SNB is not surprising.

However, my question is, does the Banca dItalia store its gold in Berne as gold sight deposits with the BIS or as earmarked custody gold with the SNB, or a combination of the two?”

“Is the gold of the Banca d’Italia that is held by the Federal Reserve Bank of New York held under earmark (custody), or held in a sight account?”

The Banca d’Italia responded (simultaneously on all questions):
“This is to inform you that unfortunately Banca d’Italia will not be giving information in addition to the website note.
Press and External Relations Division, Secretariat To The Governing Board And Communications Directorate, Bank of Italy”

By ‘website note’, the press and external relations division was referring to the 3 page report on gold reserves (see above) that the Bank published in April 2014.

Nazi Bars in Rome

The RAI television broadcast from 2010 was also notable in that it revealed that the Banca d’Italia holds bars of varied origins in its Rome vaults, including bars stamped with the official Bank of England stamp, and bars from the US Assay Office in New York including a featured bar from 1947. There are also Russian bars shown in the RAI video, one of which is shown in the video with the CCCP lettering, the hammer and sickle stamp, and the letters HKUM.

More surprisingly perhaps, is the fact that the Banca d’Italia also holds Nazi gold bars from the Prussian Mint in Berlin. The RAI broadcast video shows a 1940 Nazi bar from Berlin, stamped with the eagle and swastika insignia and with Prussian mint markings. The Nazi bar holdings can be explained by the fact that the Italian gold was confiscated by the Nazis during World War 2 and ended up being moved out of Rome up to the north of Italy and then most of it was transported onwards to Berlin in Germany or else to Switzerland. Following the war, some of the gold given back to the Italians as part of the Tripartite Commission payouts happened to be Prussian Mint bars stamped with the Nazi symbol (see below for historical account of Italian gold movements during World War 2).

riserve auree1
A view of the gold on shelves in the Palazzo Koch vaults, Rome

The Foreign held Italian gold

The Banca d’Italia gold document does not specify how much of the Italian gold is held in New York, London and Berne, apart from stating that most of the gold that is not stored in Rome is stored in New York. Note that this is even less transparent than the brief information that the Deutsche Bundesbank publishes about its gold reserves storage locations. However, the Banca d’Italia document does state that “the bulk” of foreign stored gold is in New York (“la parte più consistente è custodita a New York“), and that  “contingents of smaller size” are located in London and Berne (“Altri contingenti di dimensioni più contenute si trovano a Berna, presso la Banca Nazionale Svizzera, e a Londra presso la Banca d’Inghilterra“).

While one could argue about the meaning of ‘the bulk’ in terms of quantity, essentially the Banca d’Italia gold document implies that the London and Berne holdings are not very large. More specifically, it is possible using historical data and records of Italian gold movements to infer that there is little Italian gold in London and Berne.

Not a lot in London

It does not look like Banca d’Italia holds anything other than a very small amount of gold in London. During the late 1960s, mainly between 1966 and 1968, the Banca d’Italia transported most of the gold that it had stored at the Bank of England vaults back to Italy. Regular shipments were exported and delivered by MAT (the secure transport company) to the Banca d’Italia’s vaults in both Rome and Milan, sometimes about 4 tonnes at a time, sometimes 10 tonnes at a time. Historic Bank of England gold account “set-aside” ledger entries (C142/5 Bullion Office Set Aside Ledger, A-K, 1943-1971) show that by the end of 1969, the Banca d’Italia only held 988 gold bars in London, weighing 396,000 ozs,  or approximately 12.34 tonnes. In support of the veracity of this statement, see the specific ledger entry below.


During the Banca d’Italia’s gold transport period out of the Bank of England, various other transfers were also made from the Banca d’Italia gold account to the BIS gold account at the Bank of England. Since Italian gold reserves have not in total changed very much since December 1969, it is realistic to assume that the Banca d’Italia’s London gold holdings have not changed dramatically since December 1969, unless there have been location swaps executed since that time between London and New York or between London and Berne. This would generally only have been done for a specific reason such as to allow Italian gold lending through the London market. Significant gold lending only began in London in the mid-1980s, and the Banca d’Italia has never been on public record as having engaged in gold lending on the London Gold Lending Market.

Another possibility is that the Italians now use the BIS gold account(s) to hold gold in London in the same way that they do in Berne. This would allow the statement that some of the Italian gold is held in London to be true, even though the gold would, in this case, be held via the BIS gold account at the Bank of England, and not directly by a Banca d’Italia gold custody account in London.

Little in Berne

There does not appear to have been any Italian gold left in Berne after WWII (see historical details below), so whatever Italian balance is currently in Berne has been built up since 1946. Of relevance to the gold vaults in Berne, both the central banks of Finland (Bank of Finland) and Sweden (Riksbank) recently published the international locations of their gold reserves, and revealed that only very small percentages of their gold is kept in the Swiss National Bank vaults in Switzerland. Of the Riksbank’s 125.7 tonnes of gold reserves, only 2.8 tonnes (2.2%) is stored in the SNB vaults. For the Bank of Finland, only 7%, or 3.4 tonnes of its 49.1 tonnes of gold reserves are stored with the SNB in Switzerland.

Mostly in Manhattan

If this Swedish-Finnish 2-7% range of allocations held at the SNB was applied to the Italian gold that held outside Italy, it would result in between 25 tonnes and 87.6 tonnes of Italian gold being held at the SNB vaults in Berne. Factoring in 12 tonnes held at the Bank of England and a small amount held in Berne, this would imply nearly 1,200 tonnes of Italian gold at the Federal Reserve in New York.

There were at least 543 tonnes of Italian gold at the Federal Reserve in New York in the mid-1970s, since this was the quantity of Italian gold collateral that the Bundesbank held at the New York Fed during its first gold loan to Italy between 1974 and 1976 (see discussion below of the 1970s West Germany – Italy gold loan). If the quantities in London and Berne are as low as they appear to be, this 543 tonnes used as collateral might not have even been half the gold that Italy has custodied with the Federal Reserve Bank of New York.

A gold vault in Milan

It’s notable that the Banca d’Italia has used a vault in the city of Milan to store gold as recently as the late 1960s, although there is no mention of a Milan vault in the Banca d’Italia’s 2014 gold document. This would either imply that the gold stored in Milan in the 1960s was transported to Rome at a later date, or else that the Rome statistics may represent combined holdings stored in Rome and Milan, and are just rolled up to Rome for reporting purposes, since Rome is the head office of the Banca d’Italia. The Banca d’Italia’s Milan vault did feature as a key part of Italian gold movements during World War 2 (see below).

Historical Italian Gold

Like other central banks, the Banca d’Italia states that it uses 4 storage locations partly due to historical reasons and partly based on a deliberate strategy gold storage diversification strategy.

Although the Banca d’Italia held 498 tonnes of gold in 1925, Italian gold reserves fell to 420 tonnes in 1930, and continued to decline throughout the 1930s, falling to 240 tonnes in 1935, before another sharp fall to 122 tonnes in 1940 at the beginning of World War 2. With both Rome and Northern Italy under German occupation in 1943, the German occupiers pressurised the Banca d’Italia’s governor Azzolini to move the Italian gold north. Ultimately this led to 119 tonnes of Italian gold being transported by train from Rome to the Banca d’Italia’s vaults in Milan. But the transfer to Milan turned out to be just an interim stopover since the Germans continued to pile on pressure to move the Italian gold to Berlin.

The fascist government that controlled Northern Italy at that time initially resisted the German plan, but negotiated a compromise and agreed to move 92.3 tonnes of gold to a castle in Fortezza, in the far north of Italy near the Austrian border, close to the Brenner Pass and likewise very close (via Austria) to the German border.

Eventually the fascist government capitulated fully to the German demands and 49.6 tonnes of Italian was moved from Fortezza to the Reichsbank vaults in Berlin, followed by an additional transfer of 21.7 tonnes, so in total 71.3 tonnes of Italian gold ended up in the Reichsbank in Berlin. See here for graphic showing these wartime movements of Italian gold, and a comprehensive discussion (in Italian).

In the 1930s, the Bank for International Settlements Bank had invested substantially in Italian short-term treasury bills, which had a built-in gold conversion guarantee. Likewise, the Swiss National Bank held or was the representative for claims on some of the Italian gold. With the German pressure on the Italian gold in 1943, the BIS and SNB both became anxious about their investments and requested that their Italian gold-related be fully converted into gold with a view to moving the converted gold to the SNB vaults in Berne, Switzerland.

The Gold Trains to Berne

After intense negotiations, which the Banca d’Italia also supported (since it would allow some of the Italian gold to go to Switzerland and so avoid Berlin), the SNB and BIS succeeded in releasing the gold transfers, and over 72 years ago on 20th April 1944, 23.4 tonnes of Italian gold was sent by train from Como in Italy to Chiasso in Switzerland and then onwards by another train to Berne.

This required four railcars, two with 89 crates of gold weighing 12,605 kgs for the BIS (1,068 bars in total), and two other railcars of gold bars for the SNB which probably contained 9-10 tonnes – since this was the balance of Italian gold which did not go to Berlin or to the BIS but which had been moved to Fortezza from Milan.

A few days later on 25th April 1944, the Banca’Italia also executed an additional intra-account transfer in the Berne vault to the benefit of the BIS. This was part of a location swap with the BIS. To quote the official BIS historical narrative:

On 25th April 1944, the Bank of Italy transferred an additional 3,190 kgs of fine gold from its own gold account with the Swiss National Bank in Berne to the BIS gold account there.” (Central Bank Cooperation at the Bank for International Settlements, 1930-1973, Gianni Toniolo, BIS).

The actual transfer comprised 244 gold bars containing 2,966 kgs. An additional 233 kgs was debited from the Banca d’Italia sight account with the BIS, which suggests that the Italians only had 2,966 kgs in physical gold stored in Berne with the balance having to come from their sight deposit with the BIS (i.e. unallocated storage). (See “Note on gold shipments and gold exchanges organised by the Bank for International Settlements, 1st June 1938 – 31st May 1945.

The above suggests that the Banca d’Italia had no gold in Berne at the end of WWII. In fact, after WWII ended in 1945, the Italians essentially had very little gold anywhere except for small amounts that were left in Fortezza and found by the Allies, which was then returned to the Italians. Italy started buying gold again in 1946 with a 1.8 tonne purchase from the Banque de France. The Italians also began receiving gold back as reparations from the Tripartite Commission for the Restoration of Monetary Gold (TGC), getting 31.7 tonnes a few years after WWII ended, and another 12.7 tonnes in 1958. Since 71.4 tonnes had been taken by the Germans to Berlin, the Italians ended up with a net loss of about 27 tonnes due to theft and/or other war losses.

Some of these post-WWII gold reparations contained the Nazi Prussian Mint bars which are now stored in the Banca d’Italia’s Rome vaults. The initial gold bar reparations for Italy in the late 1940s came from the TGC account set up at the Bank of England. Records from the Clinton Library show that Italy received 575 Prussian bars set-aside from the TCG account in its early allocations. Prussian bars also made it to the Federal Reserve in New York. The same records show that were over 2,500 Prussian Mint bars held under earmark at the FRBNY for various customers as of January 1956 including the BIS, IMF, SNB, Bank of England, Netherlands and Canada among others. Some of these bars were later remelted into US Assay Office bars. (The Gold Report, Presidential Advisory Commission on Holocaust Assets in the United States, July 2000, Clinton Library).

In a similar way to other major European central banks, the Banca d’Italia’s gold reserves were mainly built up during the late 1950s and early 1960s. Although the Banca d’Italia was a relatively important official gold holder during the first half of the 20th century, it ‘only’ held 402 tonnes of gold as of 1957. But starting in 1958 and running through to the late 1960s, Italy’s gold reserves rose by nearly 600% to exceed 2,560 tonnes in 1970. See page 19 of “Central Bank Gold Reserves, An Historical perspective since 1845, by Timothy Green, Research Study No. 23, published by World Gold Council, for data on Italian gold reserve totals during the 1950s and 1960s.

Since 1970, Italy’s gold holdings have remained fairly constant, although at times some of the Italian gold has been used in various financial transactions such as:

  • gold collateral against a loan from Germany during the 1970s
  • contributions to the European Monetary Cooperation Fund (EMCF)
  • contributions to the European Central Bank (ECB)

The gold collateral transactions with Germany and the EMCF and ECB contributions explain why, in the absence of purchases or sales, Italy’s historic gold holdings statistics appear to fluctuate widely at various times since the mid-1970s.

l’Ufficio Italiano dei Cambi (UIC)

Until the 1960s, most, if not all of Italy’s official gold reserves were held not by the Banca d’Italia, but by an associated entity called l’Ufficio Italiano dei Cambi (UIC). In English, UIC translates as the “Italian Foreign Exchange Office”. The UIC was created in 1945. One of its tasks was the management of Italy’s foreign exchange reserves (also including gold).

Therefore the Italian gold purchases in the 1950s and 1960s were conducted for the account of the UIC, not the Banca d’Italia. However, during the 1960s there were two huge transfers of gold from the UIC to the Banca d’Italia, one transfer in 1960 and the second in 1965. In total, these two transactions represented a transfer of 1,889 tonnes from the UIC to the Banca d’Italia. The UIC’s main function then became the management of the national currency and not the nation’s gold. The UIC ceased to exist in January 2008 when all of its tasks and powers were transferred to the Banca d’Italia.


Gold Collateral for the Bundesbank – 1970s

In 1974, Italy required international financial aid to overcome an economic and currency crisis and ended up negotiating financial help from the Deutsche Bundesbank. This took the form of a dollar-gold collateral transaction, with the Bundesbank providing a US$ 2 billion loan secured on Italian gold collateral of equivalent value. On 5th September 1974, Karl Klasen, President of the Bundesbank, sent the specifics of the collateral agreement to Guido Carli, Governor of the Banca ‘dItalia. The details of the transaction were as follows:

US$ 2 billion was transferred from the Bundesbank to the Banca d’Italia for value date 5th September. Simultaneously, for value date 5th September, the Banca d’Italia earmarked 16,778,523.49 ounces of gold (about 522 tonnes) from its gold holdings stored at the Federal Reserve Bank in New York into the name of the Bundesbank, and received a gold claim against the Bundesbank for the same amount.  (2A96 Deutsche Bundesbank Files, 1974, Bank of England Archives).

The gold collateral was valued at $149 per ounce based on a formula of 80% of the average London gold fixing price during July and August 1974. The loan was for a six month maturity but could be rolled over up to three times, i.e. up to two years in total. It turns out that the loan was rolled over up to the maximum two years allowed. Not only that, but the entire gold-backed dollar loan was renewed in September 1976 with larger gold collateral of 17.5 million ounces or about 543 tonnes. This gold loan renewal in 1976 was underwritten by the UIC, and the 543 tonnes of gold was transferred from the Banca’Italia to the UIC prior to the loan renewal. Note that Paolo Baffi had become Governor of the Banca d’Italia in 1975, taking over from Guido Carli.

In September 1978, at the 2 year maturity date of the renewal, the 543 tonnes of gold was returned to the ownership of the Italians but instead of being transferred to the Banca d’Italia, the 543 tonnes was transferred to the balance sheet of the UIC, since the UIC had been involved in underwriting the entire loan agreement. This 543 tonnes of gold stayed on the UIC books and was revalued over the years, thereby creating a large capital gain for the UIC.

Gold capital gain Controversy – 1997/98

When the gold held by the UIC was sold to the Banca d’Italia in 1997, the UIC realised a capital gain of 7.6 billion Lira which then became taxable. The UIC then owed the Italian Exchequer 4 billion Lira, 3.4 billion Lira of which was transferred to the Italian State in November 1997. At the time in 1997, Italy was preparing for entry to the Euro, and needed to keep its deficit under the 3% ceiling required by the Maastricht Treaty criteria. Eurostat ruled that this windfall transfer to the Italian Exchequer was not allowed to be offset against the government deficit. See here for January 1998 statement from Eurostat.

However, a European Parliament parliamentary set of question in March 1998 to the European Council seems to suggests that the UIC tax payment to the Italian Exchequer was offset against Italy’s public sector deficit, and that it helped to keep the Italian deficit under the critical 3% Masstrict ceiling, thereby helping Italy to qualify for Euro membership. The parliamentary questions were from Italian politician Umberto Bossi:

“Does the Council intend to finally ascertain the nature of this transaction?

Does the Council intend to establish whether it is permissible to encourage tax revenues of this kind to be offset against the public sector deficit?

If not, does the Council not consider that this incident shows yet again that Italy has not changed its ways and is prepared to stoop to dubious accounting practices in order to enter Europe?”

The answer to this parliamentary question in June 1998 seems vague, but did not deny that the tax windfall generated by the capital gain on the 543 tonnes of gold may have helped improve the Italian fiscal condition in the run-up to Euro qualification and entry.


As referenced above, Italian gold has been contributed to various European monetary experiments since the 1970s. This explains why the yearly official total figures of Italian gold fluctuate widely over the 1970s-1990s period, and indeed have also fluctuated since 1999.

In 1979, Italy’s gold reserves dropped by 20% and stayed that way until 1998 when they increased again to the previous 1979 level. This was due to Italy contributing to the European Monetary Cooperation Fund (EMCF) which was a fund within the European Exchange Rate Mechanism (ERM) of the European Monetary System (EMS). In exchange for providing 20% of their gold and dollar reserves to the EMCF, member countries received claims denominated in European Currency Units (ECUs). [The ECU was an abstract precursor to the Euro]. The gold that was transferred to the EMCF was accounted for as gold swaps, but there was no physical movement of gold, it was just a book entry to represent a change in ownership to the EMCF.

In 1999, with the advent of the Euro (initially as a virtual currency), central bank members of the Eurozone had to again transfer gold, this time to the European Central Bank (ECB). The ECB stipulated that each member had to transfer foreign reserves assets, and 15% of these transfers had to be in the form of gold. In Italy’s case it transferred 141 tonnes of gold to the ECB, so Italy’s gold reserves fell by this amount.

The gold owned by the ECB is not centrally stored and managed by the ECB. It stays wherever it was when transferred by each member country, and the ECB delegates the management of its gold reserves to each member central bank, so essentially, it’s just another accounting transaction. It’s unclear whether the ECB gold managed by the Banca d’Italia on behalf of the ECB is “managed” any differently to the non-ECB gold (i.e. its unclear whether the same investment policy always applies to both gold holdings). One person who would certainly know the answer to that questions is Mario Draghi, current president of the ECB, former governor of the Banca d’Italia, and also born in Rome, home of the Palazzo Koch gold vault.

Is any Italian Gold pledged or leased out?

Banca d’Italia annual reports follow International Monetary Fund reporting conventions and classify the gold in its balance sheet as ‘gold and gold receivables‘. In September 2011, when I asked the Banca d’Italia to clarify what percentage of the asset category ‘gold and gold receivables’ in its 2010 balance sheet referred to gold held, and what percentage represented gold receivables, the Bank’s press office replied succinctly that “it’s only gold, no receivables.”

Following the publication of the Bank’s three page gold document in April 2014, I asked the Banca d’Italia press office a number of questions (see above), one of which was about gold leasing:

Are any of the Bank’s gold reserves subject to lease agreements, and if so, what percentage of the gold is leased out? Is any of the Bank’s gold swapped or pledged in any other way?

As mentioned above, the Banca d’Italia’s response was:

This is to inform you that unfortunately Banca d’Italia will not be giving information in addition to the website note.
Press and External Relations Division, Secretariat To The Governing Board And Communications Directorate, Bank of Italy”


Gold Audits

The Banca d’Italia states in its 3 page gold document that external auditors verify the gold held in Rome each year in conjunction with the Bank’s own internal auditors. For the gold held abroad, the external auditors are said to audit this using annual certificates issued by the central banks that act as the depositories (the  depositories being the Federal Reserve Bank of New York, the Bank of England, and either the BIS or perhaps the SNB depending on the type of certificate that is issued for BIS deposits).

This approach is analogous to the methodology used to audit the German gold reserves stored abroad, i.e. there is no independent physical audit of the gold stored abroad by the Bundesbank. The paper-pushing auditors merely audit pieces of paper.

As regards the Banca d’Italia’s gold holdings at the Bank for International Settlements (BIS), these holdings could either be in the form of a “Gold Sight Account” or a “Gold Ear-Marked Account”, as explained here by the Bank of Japan in 2000 when it switched its gold holdings at the BIS from a gold sight account to a gold earmarked account:

“The Bank of Japan has recently transferred its claims against the Bank for International Settlements (BIS) embodied in a “Gold Sight Account” to a “Gold Ear-marked Account” with the BIS.” (July 2000)

If the Banca d’Italia’s gold holdings at the BIS are just in a sight account, then this is just a claim on a balance of gold, not a holding of specific gold bars.

It’s also surprising to me that the mainstream media have taken a significant, albeit superficial, interest in the Bundesbank’s ongoing exercise to repatriate 300 tonnes of its gold reserves from New York to Frankfurt, but zero interest in the fact that the Banca d’Italia supposedly has a huge amount of gold stored in New York that has never physically audited it and does not even see a need to repatriate it.

Banca d’Italia office in Manhattan

Like the Bundesbank,  the Banca d’Italia also maintains a representative office in New York, at 800 Third Avenue – 26th Floor, New York – NY 10022 (see representative office contact details here). The head of this representative office is Giovanni D’Intignano (see LinkedIn). Therefore, it should be very easy for the Banca d’Italia to ask the Federal Reserve Bank of New York to conduct an on-site physical gold audit of the Italian gold at the vaults of the New York Fed, all 1000 plus tonnes of it.

In fact, the Banca d’Italia also maintains another of its only 3 representative offices abroad in London at 2 Royal Exchange, London EC3V 3DG, which is right across the road from the Bank of England’s headquarters and gold vaults. It should therefore also be a simple matter for the Banca d’Italia to also organise a physical on-site audit of its gold reserves stored at the Bank of England in London, something the Bank of England has been allowing its gold storage customers to do since 2013.

Political Awakening

There has been a developing political trend recently in Italy for more transparency on the Italian gold and also calls for its ownership and title to be protected against control by outside entities.

In January 2012, Italian politican Rampelli Fabio (co-signed by Marco Marsilio) submitted some written questions to the Italian Ministry of Economy and Finance, a department headed at the time by Mario Monti (Monti was also simultaneously Italian Prime Minister at that time), asking the following questions about the Italian gold (questions 4-14567 : Italian version and English version):

“When and under what agreement or statutory provision were the storage location decisions (regarding New York, London and BIS Switzerland) taken and whether that strategic decision is still considered to serve the interests of Italy?

Who owns the gold reserves held at Palazzo Koch (in Rome) and the gold reserves held at the foreign locations?

Does Italy have full availability to the gold reserves held at the Bank of Italy and at the foreign locations?”

Even though these questions were submitted nearly 5 years ago, the official status of the questions on the parliamentary website still says “In Progress”,  suggesting that they have not been answered by the Ministry of Finance. I can find no other evidence elsewhere either that these questions were ever answered.

Senators visit Palazzo Koch vault

Three Italian senators of the political party Movimento Cinque Stelle visited the Banca d’Italia gold vaults in Rome on 31 March 2014 and are calling for the ownership of the gold to be transferred from the Banca d’Italia to the Italian public so that its control cannot be compromised. See video below of their before and after visit which was broadcast from outside the Palazzo Koch vault in Rome.

These 3 representative (in the above video) are Senator Giuseppe Vacciano, Senator Andrea Cioffi and Senator Francesco Molinari.  I do not have a direct English translation of this video, however, anyone interested can translate this page from Italian,  which was published on 3 April 2014, and features Senator Vacciano explaining the senators’ vault visit.

In his report, Vacciano confirm some interesting facts, such as that the Italian gold belongs to the Banca d’Italia and not the Italian State.  The ownership issue is also confirmed by the Banca d’Italia’s 3 page gold report (see above) which states:

“La proprietà delle riserve ufficiali è assegnata per legge alla Banca d’Italia” – (Ownership of official reserves is assigned by law to the Bank of Italy)

Unusually for a central bank, Banca d’Italia’s share capital is held by a diverse range of Italian banks and other financial institutions as well as by the Italian state

Vaccciano also confirmed that in the vault they saw some South African gold bars, many American gold bars, and “several bearing the Nazi eagle”. And in a similar way to the RAI reporter Alberto Angela, who said in 2010 that he was speechless when viewing the gold in the sacristy, Vacciano says:

from a purely human perspective, we could see with our own eyes a quantity of precious metal that goes beyond an ordinary perception … I must say that arouses feelings that are difficult to explain“.

Italian Citizens

The Italian business community and public appear to be quite aware of the importance of the country’s gold reserves. In May 2013, the World Gold Council conducted a survey of Italian business leaders and citizens which included various questions about the Italian gold reserves. The findings showed that 92% of business leaders and 85% of citizens thought that the Italian gold reserves should play an important role in Italy’s economic recovery. There was very little appetite to sell any of the gold reserves, with only 4% of both citizens and business leaders being in favour of any gold sales. Finally, 61% of the business leaders and 52% of the citizens questioned were in favour of utilising the gold reserves in some way without selling any of them. The World Gold Council interpreted this sentiment as allowing the possibility for a future Italian gold-backed bond to be issued with Italian gold as collateral. The Italian gold could thus play a role similar to that used to collateralise the international loans from West Germany to Italy in the 1970s.

Mario Draghi – Last Word

For now, the last word on the Italian goes to Draghi. Even Mario Draghi, former governor of the Banca d’Italia, and current president of the European Central Bank, has a similar view to the Italian public about not selling the Italian gold. In the video below of a 2013 answer to a question from Sprott’s Tekoa Da Silva, Draghi says that he never thought it wise to sell Italy’s gold since it acts as a ‘reserve of safety’. However, as would be expected from a smoke-and-mirrors central banker, Draghi doesn’t reveal very much beyond generalities, and certainly no details of storage locations or whether the Italian gold comprises gold receivables as well as unencumbered gold.


IMF Gold Sales – Where ‘Transparency’ means ‘Secrecy’

Welcome to the twilight zone of IMF gold sales, where transparency really means secrecy, where on-market is off-market, and where IMF gold sales documents remain indefinitely “classified” and out of public view due to the “sensitivity of the subject matter”.

Off and On Market

Between October 2009 and December 2010, the International Monetary Fund (IMF) claims to have sold a total of 403.3 tonnes of gold at market prices using a combination of ‘off-market’ sales and ‘on-market’ sales. ‘Off-market’ gold sales are gold sales to either central banks or other official sector gold holders that are executed directly between the parties, facilitated by an intermediary. For now, we will park the definition of ‘on-market’ gold sales, since as you will see below, IMF ‘on-market’ gold sales in reality are nothing like the wording used to describe them. In total, this 403.3 tonnes of gold was purportedly sold so as to boost IMF financing arrangements as well as to facilitate IMF concessional lending to the world’s poorest countries. As per its Articles of Agreement, IMF gold sales have to be executed at market prices.

Critically, the IMF claimed on numerous occasions before, during and after this 15-month sales period that its gold sales process would be ‘Transparent. In fact, the concept of transparency was wheeled out by the IMF so often in reference to these gold sales, that it became something of a mantra. As we will see below, there was and is nothing transparent about the IMF’s gold sales process, but most importantly, the IMF blocked and continues to block access to crucial IMF board documents and papers that would provide some level of transparency about these gold sales.

Strauss-Kahn – Yes, that guy

On 18 September 2009, the IMF announced that its Executive Board had approved the sale of 403.3 metric tonnes of gold. Prior to these sales, the IMF officially claimed to hold 3217.3 tonnes of gold. Commenting on the gold sales announcement, notable party attendee and then IMF Managing Director Dominique Strauss-Kahn stated:

“These sales will be conducted in a responsible and transparent manner that avoids disruption of the gold market.”

The same IMF announcement on 18 September 2009 also stated that:

“As one of the elements of transparency, the Fund will inform markets before any on-market sales commence. In addition, the Fund will report regularly to the public on the progress with the gold sales.”

DSK has left the building
DSK has left the building

On 2 November 2009, the IMF announced the first transaction in its gold sales process, claiming that it had sold 200 tonnes of gold to the Reserve Bank of India (RBI) in what it called an ‘off-market’ transaction. This transaction was said to have been executed over 10 trading days between Monday 19 November to Friday 30 November with sales transactions priced each day at market prices prevailing on that day. On average, the 200 tonne sales transaction would amount to 20 tonnes per day over a 10 day trading period.

Note that the Reserve Bank of India revealed in 2013 that this 200 tonne gold purchase had merely been a book entry transfer, and that the purchased gold was accessible for use in a US Dollar – Gold swap, thereby suggesting that the IMF-RBI transaction was executed for gold held at the Bank of England in London, which is the only major trading center for gold-USD swaps. As a Hindu Business Line article stated in August 2013:

“According to RBI sources, the gold that India bought never came into the country as the transaction was only a book entry. The gold was purchased for $6.7 billion, in cash.”

“The Reserve Bank of India bought 200 tonnes of gold for $1,045 an ounce from the IMF four years ago. The Government can swap it for US dollars,” said [LBMA Chairman David] Gornall.”

Two weeks after the Indian purchase announcement in November 2009, another but far smaller off-market sale was announced by the IMF on 16 November 2009, this time a sale of 2 tonnes of gold to the Bank of Mauritius (the Mauritian central bank), said to have been executed on 11 November 2009. Another two weeks after this, on 25 November 2009, the IMF announced a third official sector sales transaction, this time a sale of 10 tonnes of gold to the Central Bank of Sri Lanka.

Overall, these 3 sales transactions, to the Reserve Bank of India, Bank of Mauritius and the Central Bank of Sri Lanka, totalled 212 tonnes of gold, and brought the IMF’s remaining official gold holdings down to 3005.3 tonnes at the end of 2009, leaving 191.3 tonnes of the 403.3 tonnes remaining to sell. All 3 of the above announcements by the IMF were accompanied by the following statement:

“The Fund will inform markets before any on-market sales commence, and will report regularly to the public on progress with the gold sales.”

For nearly 3 months from late November 2009, there were no other developments with the IMF’s  gold sales until 17 February 2010, at which point the IMF announced that it was to begin the ‘on-market’ portion of its gold sales program. At this stage you might be wondering what the IMF’s on-market gold sales consisted of, which ‘market’ it referred to, how were the sales marketed, who the buyers were, and who executed the sales transactions. You would not be alone in wondering about these and many other related questions.

The IMF’s press releases of 17 February 2010, titled ‘IMF to Begin On-Market Sales of Gold’ was bereft of information and merely stated that the IMF would “shortly initiate the on-market phase of its gold sales program” following “the approach adopted successfully by the central banks participating in the Central Bank Gold Agreement“, and that the sales would be “conducted in a phased manner over time”. The third Central Bank Gold Agreement (CBGA) ran from September 2009 to September 2014. These CBGA’s, which have been running since September 1999, ostensibly claim to support and not disrupt the gold market but in reality have, in their entirety, been highly secretive operations where vast amounts of central bank and official sector gold is channeled via the BIS to unspecified buyers in the bullion banks or central bank space, with the operations having all the hallmarks of gold price stabilization operations, and/or official sector gold redistribution between the world’s developed and emerging market central banks.

The February 2010 announcement also made the misleading claim that “the IMF will continue to provide regular updates on progress with the gold sales through its normal reporting channels”. These regular updates have never happened.

An article titled “IMF ‘On-Market’ Gold Sales Move Ahead” in the ‘IMF Survey Magazine’, also dated 17 February 2010 reiterated this spurious transparency claim:

Transparent approach

The IMF publicly announced each official sale shortly after the transaction was concluded. A high degree of transparency will continue during the sales of gold on the market, in order to assure markets that the sales are being conducted in a responsible manner.”

However, following this February 2010 lip service to transparency, there were no direct updates from the IMF exclusively about the on-market gold sales, even after the entire gold sales program had completed in December 2010.

One further IMF ‘off-market’ gold sale transaction was announced on 9 September 2010. This was a sale of 10 tonnes of gold to Bangladesh Bank (the Bangladeshi central bank) with the transaction said to have been executed on 7 September 2010. Adding this 10 tonnes to the previous 212 tonnes of off-market sales meant that 222 tonnes of the 403.3 tonne total was sold to central banks, with the remaining 181.3 tonnes sold via ‘on-market’ transactions. The Bangladesh announcement was notable in that it also revealed that “as of end July 2010, a further 88.3 metric tons had been sold under the on-market sales announced in February 2010″. The addition of Bangladesh to the off-market buyer list that already consisted of India, Sri Lanka and Mauritius also resulted in the quite bizarre situation where the only off-market buyers of IMF comprised 4 countries that have extremely close historical, political, cultural and economic connections with each other. Three of these countries, India, Bangladesh and Sri Lanka, are represented at the IMF by the same Executive Director, who  from November 2009 was Arvind Virmani, so their buying decisions were most likely coordinated through Virmani and probably through the Reserve Bank of India as well.

On 21 December 2010, the IMF issued a press release titled ‘IMF Concludes Gold Sales’ which stated:

“The International Monetary Fund (IMF) announced today the conclusion of the limited sales program covering 403.3 metric tons of gold that was approved by the Executive Board in September 2009.”

“The gold sales were conducted under modalities to safeguard against disruption of the gold market. All gold sales were at market prices, including direct sales to official holders.”

‘Modalities’ in this context just means the attributes of the sales including the approach to the gold sales, i.e. the sales strategy. This brief announcement on 21 December 2010 was again bereft of any factual information such as which market was used for the ‘on-market’ gold sales, the identity of executing brokers, the identity of counterparties, transaction dates, settlement dates / deferred settlement dates, method of sale, information on whether bullion was actually transferred between parties, publication of weight lists, and other standard sales transaction details. Contrast this secrecy to the 1976 -1980 IMF gold sales which were conducted by a very public series auction, and which were covered in minute details by the financial publications of the time.

As usual with its treatment of official sector gold transactions, the World Gold Council’s Gold Demand Trends report, in this case its Q4 2010 report, was absolutely useless as a source of information about the IMF gold sales beyond regurgitating the press release details, and there was no discussion on how the gold was sold, who the agent was, who the buyers were etc etc.

Lip Service to Transparency

When the IMF’s ‘on-market’ sales of 191.3 tonnes of gold commenced in February – March 2010, there were attempts from various quarters to try to ascertain actual details of the sales process. Canadian investment head Eric Sprott even expressed interest in purchasing the entire 191.3 tonnes on behalf of the then newly IPO’d Sprott Physical Gold ETF. However, Sprott’s attempts to purchase the gold were refused by the IMF, and related media queries attempting to clarify the actual sales process following the IMF’s blockade of Sprott were rebuffed by the IMF.

A Business Insider article from 6 April 2010, written by Vince Veneziani and titled “Sorry Eric Sprott, There’s No Way You’re Buying Gold From The IMF”, lays out the background to this bizarre stone-walling and lack of cooperation by the IMF. Business Insider spoke to Alistair Thomson, the then external relations officer at the IMF (now Deputy Chief of Internal Communications, IMF), and asked Thomson why Sprott could not purchase the gold that was supposedly available in the ‘on-market’ sales. Thomson’s reply is summarised below:

“The IMF is only selling gold though a qualified agent. There is only one of these agents at the moment and due to the nature of the gold market, they won’t reveal who or what that agent is.”

“Sprott can’t buy the gold directly because they do not deal with institutional clients like hedge funds, pension funds, etc. The only buyers can be central bankers and sovereign nations, that sort of thing.”

The IMF board agreed months ago how they wanted to approach the sale of the gold. Sprott is welcome to buy from central banks who have bought from the IMF, but not from the IMF directly.”

While this initial response from the IMF’s Alistair Thomson contradicted the entire expectation of the global gold market which had been earlier led to believe that the ‘on-market’ gold sales were just that, sales of gold to the market, on the market, Thomson’s reply did reveal that the IMF’s ‘on-market’ gold sales appeared to be merely an exercise in using an agent, most likely the Bank for International Settlements (BIS) gold trading desk, to transfer IMF gold to a central bank or central banks that wished to remain anonymous, and not go through the publicity of the ‘off-market’ transfer process.

Although, as per usual, the servile and useless mainstream media failed to pick up on this story, the IMF’s unsatisfactory and contradictory response was deftly dissected by Chris Powell of GATA in a dispatch, also dated 6 April 2010. After discussing the IMF’s initial reply with Eric Sprott and GATA, Business Insider’s Vince Veneziani then went back to IMF spokesman Alistair Thomson with a series of reasonable and totally legitimate questions about the ‘on-market’ gold sales process.

Veneziani’s questions to the IMF are documented in his follow-up Business Insider article titled “Five Questions About Gold The IMF Refuses To Answer”, dated 27 April 2010. These questions included:

  • What are the incentives for the IMF not to sell gold on the open market or to investors, be it institutional or retail?
  • Did gold physically change hands with the banks you have sold to so far or was the transaction basically bookkeeping stuff (the IMF still holds the physical gold in this case)?
  • Are there available records on the actual serial numbers of bullion? How is the gold at the IMF tracked and accounted for?
  • Does IMF support a need for total transparency in the sale of gold despite the effects it could have on various markets?

Shockingly, Alistair Thomson, supposedly the IMF press officer responsible for answering the public’s queries about IMF finances (including gold sales), arrogantly and ignorantly refused to answer any of the questions, replying:

“I looked through your message; we don’t have anything more for you on this.”

Another example of the world of IMF transparency, where black is white and white is black, and where press officers who have formerly worked in presstitute financial media organisations such as Thomson Reuters fit in nicely to the IMF’s culture of aloofness, status quo protection, and lack of accountability to the public.

International Monetary Fund

Monthly Report on Sales of Gold on the Market

Fast forward to July 2015. While searching for documents in the IMF online archives related to these gold sales, I found 3 documents dated 2010, titled “Monthly Report on Sales of Gold on the Market“. Specifically, the 3 documents are as follows (click on links to open):

Each of these 3 documents is defined by the IMF as a Staff Memorandum (SM), which are classified as ‘Executive Board Documents’ under its disclosure policy. The IMF Executive Board consists of 24 directors in addition to the IMF Managing Director, who was in 2009 the aforementioned Dominique Strauss-Kahn. According to the IMF’s Executive Board synopsis web page, the board “carries out its work largely on the basis of papers prepared by IMF management and staff.

IMF SB March 2010

The most interesting observation about these 3 documents, apart from their contents which we’ll see below, is the fact that only 3 of these documents are accessible in the IMF archives, i.e. the documents only run up to May 2010, and do not include similar documents covering the remainder of the ‘on-market’ sales period (i.e. May – December 2010). Therefore there are 7 additional monthly reports missing from the archives. That there are additional documents that have not been published was confirmed to me by IMF Archives staff – see below.

Each of the 3 reports is only 3 pages long, and each report follows a similar format. The first report spans February – March 2010, specifically from 18 February 2010 to 17 March 2010, and covers the following:

summarizes developments in the first month of the on-market sales, covering market developments, quantities sold and average prices realized, and a comparison with widely used benchmarks, i.e., the average of London gold market fixings

‘Market developments’ refers to a brief summary in graphical chart of the London fixing prices in US Dollars over the period in question. Quantities sold and the currency composition of sales are notable:

Sales Volume and Proceeds: A total of 515,976.638 troy ounces (16.05 metric tons) of gold was sold during the period February 18 to March 17. These sales generated proceeds of SDR 376.13 million (US$576.04 million), based on the Fund’s representative exchange rates prevailing on the day of each sale transaction.

Currency Composition of Proceeds: Sales were conducted in the four currencies included in the SDR valuation basket …., with the intention of broadly reflecting the relative quota shares of these currencies over the course of the sales program.

The 4 currencies in which the sales were conducted during the first month were USD, EUR, GBP and JPY. See table 1 in the document for more information. Perhaps the most revealing point in each document is the confirmation of the use of an agent and specifically an arrangement that the sales prices included a premium paid by the agent:

Sales Prices compared with Benchmarks: The sales were implemented as specified in the agreement with the agent. Sales were conducted at prices incorporating a premium paid by the agent over the London gold fixing, and for sales settled in currencies other than the U.S. dollar, the sales price also reflects market exchange rates at the time of the London gold fixings (10:30 am and 3:00 pm GMT), net of a cost margin.

The use of a premium over the London fixing price is very revealing because this selling strategy, where the agent paid a premium over the average London gold fixing price, is identical to the sales arrangement which the Swiss National Bank (SNB) agreed with the Bank for International Settlements (BIS) when the BIS acted as sales agent for SNB gold sales over the period May 2000 to March 2001.

As Philipp Hildebrand, ex-governor of the SNB, revealed in 2005 when discussing the SNB gold sales strategy that had been used in 2000-2001:

“At the outset, the SNB decided to use the BIS as its selling agent. Between May 2000 and March 2001, the BIS sold 220 tonnes on behalf of the SNB. For the first 120 tonnes, the SNB paid the BIS a fixed commission while the performance risk resided with the SNB. For the next 100 tonnes, the BIS agreed to pay the average price of the AM and PM London gold fixing plus a small fixed premium.

My conclusion is therefore that the IMF also used the Bank for International Settlements in Basel, Switzerland  as selling agent for its ‘on-market’ gold sales over the period February to December 2010, with the sales benchmarked to average London fixing prices in the London Gold Market.

The pertinent details for the IMF’s March – April sales document are as follows:

“A total of 516,010.977 troy ounces (16.05 metric tons) of gold was sold during the period March 18 to April 16.” 

“Sales were conducted in three of the four currencies included in the SDR valuation basket” i.e. USD, EUR and JPY”

The relevant details from the April – May sales document are as follows:

“A total of 490,194.747 troy ounces (15.25 metric tons) of gold was sold during the period April 19 to May 18, 2010; no sales were conducted during the last two business days in April, owing to end of financial year audit considerations.”

“Sales were conducted in three of the four currencies included in the SDR valuation basket” i.e. USD, GBP and JPY

Purely a Pricing Exercise?

The entire ‘on-market’ gold sales program of 181.3 tonnes may well have been just a pricing exercise by the Bank for International Settlements gold trading desk to determine the market prices at which to execute the transfers, with the gold transferring ownership after the event as book entry transfers at the Bank of England in the same manner as was applied to the Indian ‘off-market’ purchase of 200 tonnes.

Taking the sales quantities in the 3 published monthly reports, and incorporating quarterly IMF gold holdings time series data from the World Gold Council, it’s possible to calculate how much gold was ‘sold’ each single day over the entire ‘on-market’ gold sales program. As it turns out, for much of the program’s duration, identical quantities of gold were sold each and every day.  The ‘on-market’ program commenced on 18 February 2010. Between 18 February and 17 March, which was a period of 20 trading days in the London gold market, the agent sold  515,976.638 troy ounces (16.05 metric tons) of gold. Between 18 March and 16 April, which was also a trading period of 20 trading days (even after factoring in 2 Easter bank holidays), the agent sold a practically identical quantity of 516,010.977 troy ounces (also 16.05 metric tons). This is a daily sales rate of 25,800 ozs or 0.8025 tonnes per trading day over these 40 trading days.

During the period from 19 April to 18 May 2010, which was 19 trading days excluding the 3rd May UK bank holiday and excluding the last 2 trading days of April on which the IMF program didn’t trade, the agent sold 490,194.747 troy ounces (15.25 metric tons) of gold, which again is…wait for it… 0.8025 tonnes and 25,800 ozs per day (0.8025  * 19 = 15.2475 tonnes & 25,800 * 19 = 490,200 ozs).

Following the combined Indian, Mauritian, and Sri Lankan ‘off-market’ purchases of 212 tonnes during Q4 2009, the IMF’s gold holdings stood at 3,005.32 tonnes at the end of 2009. Based on World Gold Council (WGC) quarterly data of world official gold reserves, the IMF’s gold holdings then decreased as follows during 2010:

– 24.08 MT (Q1) – 47.34 MT (Q2) – 67.66 MT (Q3) – 52.2 MT (Q4) =  – 191.28 metric tonnes (MT)

…resulting in total remaining gold holdings of  2,814.04 tonnes at the end of 2010, an IMF gold holdings figure which remains unchanged to this day.

These WGC figures tally with the IMF monthly report figures. For example, the IMF says that 16.05 tonnes was sold up to and including 17 March, and with another 10 trading days in March 2010, a further 8.205 tonnes (0.8025 daily sales * 10) was sold by the end of March, giving total Q1 sales of 16.05 + 8.025 = 24.075 tonnes, which is identical to the WGC quarterly change figure. The IMF was active on 59 trading days in Q2 during which it sold 47.34 tonnes, which…wait for it…was an average of 0.8024 tonnes per day (47.34 / 59 = 0.8024).

Therefore, over Q1 and Q2 2010 (i.e. between February and the end of June 2010), the ‘on-market’ sales program sold 71.42 tonnes at a consistent ~ 0.8025 tonnes daily rate. This would suggest an algorithmic program trade which offered identical quantities each and every day, or more likely just priced these quantities so as to arrive at a sales consideration amount so that the IMF would receive ‘market prices’ for its gold. Recall that IMF gold has to be sold at market prices according to the Fund’s Articles of Agreement.

Given that 88.3 tonnes had been sold ‘on-market’ by the end of July 2010 as the IMF revealed in its Bangladesh announcement, we can infer that 16.88 tonnes was sold ‘on-market’ during July 2010. This 16.88 tonne sale in July was actually at a slightly lower pace than previous months since there were 22 trading days in July 2010, however the figure was chosen due to the following: With 191.3 tonnes on sale at the outset of the ‘on-market’ program, and 71.42 tonnes sold by the end of June, this left 119.88 tonnes to sell at the end of June. Whoever was choosing the monthly sales quantities wanted to finish July with a round figure of 103 tonnes, and so chose 16.88 tonnes to sell in July (i.e. 119.88 – 16.88 = 103 tonnes). Subtracting the 10 tonnes that Bangladesh bought in September 2010 (which would have been also factored in at that time) left a round 93 tonnes (2.999 million ozs) to sell as of the beginning of August.

The Q3 2010 sales of 67.66 tonnes comprised the 10 tonne ‘off-market’ sale to Bangladesh on 7 September and 57.66 tonnes of on-market sales. Given 16.88 tonnes sold in on-market sales in July, there was therefore 40.78 tonnes sold over August – September, or an average of 20.39 tonnes in each of August and September (which represented a combined 43 trading days). Overall, there were 65 trading days in Q3 and 58 trading days in Q4 (assuming that the sales wrapped up on 21 December as per the IMF announcement). From the beginning of August to the 21 December, a period of 101 trading days, the IMF sold the remaining 93 tonnes, which would be a daily sales pace of 0.93 tonnes per day.

So overall, the IMF’s 403.3 tonnes of gold sales between November 2009 and December 2010 consisted of 222 tonnes sold ‘off-market’ to India, Bangladesh, Sri lanka, and Mauritius, 88.3 tonnes sold ‘on-market’ between February and July 2010, and 93 tonnes sold ‘on-market’ between August and December 2010′.

Given that the IMF’s 4 gold depositories are the Federal Reserve Bank of New York, the Bank of England in London, the Banque de France in Paris and the Reserve Bank of India in Nagpur India, and given that the IMF gold in New York is mostly in the form of US Assay Office melts, and the gold in Nagpur is a hodgepodge of mostly low quality old gold (read non-good delivery gold), then it would be logical for the IMF to sell some of its good delivery gold which is stored in London (which, until at least the late 1970s, was predominantly held in the form of Rand Refinery 400 oz gold bars), or even in Paris, since the Banque de France has been engaged in an ongoing program of upgrading the old US Assay office gold bars in its custody to good delivery bars.

As the Banque de France’s Alexandre Gautier commented in his 2013 speech to the LBMA annual conference in Rome:

“Our bars are not all LGD [London Good Delivery quality], but we have an ongoing improvement programme.”

This Banque de France gold bar upgrading program was also confirmed in February 2011 in a National Geographic Magazine article which stated:

“Buyers don’t want the beat-up American gold. In a nearby room pallets of it are being packed up and shipped to an undisclosed location, where the bars will be melted down and recast in prettier forms.”

Magic 7

Top Secret Foot Notes

There are 2 interesting footnotes on page 1 or each of the 3 above documents. The first footnote states that ‘The Executive Board was briefed on the plans for on-market sales prior to the announcement’, the announcement in question being the IMF’s 17 February 2010 announcement IMF to Begin On-Market Sales of Gold.

The second footnote, which is a footnote to a sales process and sales performance summary, refers to 2 further IMF papers as follows: “Modalities for Limited Sales of Gold by the Fund (SM/09/243, 9/4/09) and DEC/14425-(09/97), 9/18/09“.

Footnotes IMF SM gold sales on market
Footnote ‘2’ of IMF ‘monthly gold sales’ documents, February – May 2010

As mentioned above, SM are Staff Memorandums which are classed under Executive Board Documents. DEC series document are ‘Text of Board Decisions’ (hence the DEC) and these documents are also deemed to be Executive Board Documents. After searching for both of these documents (SM/09/243 and DEC/14425-(09/97)) in the IMF archives, it became apparent that they were not there, i.e. they were not returned and not retrievable under IMF archive search results.

This was surprisingly since the IMF claims to have what it calls its “IMF Open Archives Policy”, part of which is Article IX, Section 5, which is the “Review of the Fund’s Transparency Policy—Archives Policy“. This policy, prepared by the IMF Legal Department includes the following:

Access will be given as follows:

  • 2. (i) Executive Board documents that are over 3 years old

(ii) Minutes of Executive Board meetings that are over 5 years old;

(iv) Other documentary materials maintained in Fund archives over 20 years old.

  • 3. Access to Fund documents specified in paragraph 2 above that are classified as “Secret” or “Strictly Confidential” as of the date of this Decision will be granted only upon the Managing Director’s consent to their declassification. It is understood that this consent will be granted in all instances but those for which, despite the passage of time, it is determined that the material remains highly confidential or sensitive.

Given that the 2 above gold sales documents, as well as 7 other monthly reports about ‘on-market’ gold sales were missing from the archives, but all the while the IMF claimed its on-market gold sales to be “Transparent”, the next logical step was to contact the IMF Archives people and seek explanations. What follows below is the correspondence I had with the IMF Archives staff. The IMF Archives staff were very helpful and their responses were merely communicating what they had found in their systems or had been told ‘from above’. My questions and emails are in blue text. The IMF replies are in red text. My first set of queries were about the SM/09/243 and DEC/14425 documents:

02 August 2015: My first question

Hello Archives,

I’m looking for IMF document SM/09/243 “Modalities for Limited Sales of Gold by the Fund” (Sept 4th 2009) in the IMF Archives catalog (http://archivescatalog.imf.org/search.aspx). However, SM/09/243 does not appear to be in the online Archives.
But, for example SM/09/242 and SM/09/244 are both retrievable in the searchable archives, but not SM/09/243.
Can you clarify where SM/09/243 is?
02 August 2015: My second question
Hello Archives,

Could you clarify how to search for and retrieve a document in the IMF online Archives that has reference “DEC/14425-(09/97)”
This document is dated 9/18/09.  I cannot find it using any of the search parameters.

3 August: IMF Archives reply

Thank you for contacting the IMF Archives. Both documents you are referring to in your recent communication, SM/09/243 and DEC/14425, are not available to the public. Please visit our website to consult on IMF Policy on Access to the Archives.

3 August: me

Can you clarify why these documents are not available to the public? i.e. have they received a certain classification?

4 August: IMF Archives

You are absolutely right, despite the time rule, these two documents are still closed because of the information security classification.  We hope it answers your question.

4 August: me

Thanks for answer. Would you happen to know when (and if) these files will be available…..assuming it’s not a 20 year rule or anything like that.

5 August: IMF Archives

Could you please provide some background information about your affiliation and the need to obtain these documents.  Classified documents undergo declassification process when such a request is submitted.  It can be a lengthy process up to one year.

5 August: me

I was interested in these specific documents because I am researching IMF gold sales for various articles and reports that I’m planning to write.

6 Aug: IMF

Thank you for providing additional information regarding your inquiry.  Please send us a formal request for the declassification of these two documents specifying your need to have access to them.  We will follow through on your behalf and get back to you with a response.

Before I had replied with a formal request, the IMF archives people contacted me again on 12 August 2015 as follows:

12 Aug: IMF

While waiting for your official request we made preliminary inquiries regarding the requested documents. The decision communicated back to us is not to declassify these documents because of the sensitivity of the subject matter.

In the meantime, we want to make sure you have checked publicly available documents on the same topic accessible from the IMF.org: https://www.imf.org/external/np/sec/pr/2009/pr09310.htm

12 August: me

Thank you for the clarification. That’s surprising about the classification given that the IMF on-market gold sales were supposed to be transparent.

Was there any information fed back to Archives on why the ‘subject matter’ is deemed sensitive?

14 Aug: IMF Archives

“Thank you for your follow-up email.  Unfortunately, these particular documents are still deemed classified and no further explanation has been communicated to the Archives.

My next set of questions to IMF Archives in August 2015 addressed the 7 missing monthly gold sales reports that should have covered May – December 2010. Since there is a 3 year rule or maybe at max a 5 year rule under the IMF’s Transparency Policy (Archive Policy), I thought that maybe the May/June, June/July, and July/August 2010 files might be due for  automatic release under the 5 year rule by the end of August 2015.

22 August 2015: Me:

“I have a question about documents which appear in the online Archive after the 5 year schedule.

Is there a scheduled update or similar which puts newly available documents in the Archive when the 5 years has elapsed?

For example, I see some documents in the Archive from June 2010, but not July/August 2010. Is there an automated process that runs, but that hasn’t yet run for July/August 2010, that puts the latest documents into the publicly available Archive?”

24 August: IMF

“Thank you for your inquiry.  The review and declassification of eligible documents that meet the time rule is done by batches. Therefore, publication does not happen in real time.  It is a process that takes time and might cause a delay.  We will let you know when July and August documents are posted.”

2 October 2015: me

“Do you know when documents from June 2010 onwards will be added to the IMF online archive? I still don’t see any yet.

Is there a batch of declassifications for June 2010 / July 2010 / August 2010 happening soon?”

2 October: IMF

“Thank you for contacting the IMF Archives. Unfortunately, we are unable to speculate about the documents website availability and provide a more specific timeframe than the one already communicated in the attached correspondence. As already promised, we will let you know when July and August documents are posted.”

Then about 30 minutes later  (on 2 October 2015) the IMF sent me another email:

2 October: IMF

“Dear Mr. Manly,

I ran a sample search of Executive Board minutes available via IMF Archives catalog and was able to find minutes issued in June and July 2010. Is there a specific document you are looking for which you are unable to find?


2 October: Me

“I was searching for the next months’ reports in the below series, report name “Monthly Report on Sales of Gold on the Market” – see screenshot attached.

The current search retrieval brings back 3 reports spanning February- May 2010, but nothing after May 2010. Report names in the retrieved search results are:


I was wondering if a couple of months in this series after May 2010 are available now?”

5 October: IMF

The reports after May 2010 haven’t been declassified for public access because of the sensitivity of the subject matter, and therefore they are not available for retrieval.

We apologize for any inconvenience this may cause.”

5 October: Me

“Thanks for the reply. Out of interest, why were the reports from February to May 2010 declassified, since surely the June-December 2010 monthly reports are identical to the first three months in that they are also just providing monthly updates on the same batch of gold ~180 tonnes of gold which was being sold over the 10 month period?”

7 October: IMF

“Dear Mr. Manly,

This series of reports is under review at the moment, and according to security classification they are currently closed.


IMF Archives”

And there you have it folks. This is IMF transparency. As per the IMF Archive disclosure policy, only Christine Lagarde, current IMF Managing Director, has the authority to consent to the declassification of classified Executive Board documents.

Sensitivity of Subject Matter – China and Bullion Banks

The above IMF responses speak for themselves, but in summary, here we have an organization which claims to be transparent and which claims to have run a transparent ‘on-market’ gold sales program in 2010, but still after more than 6 years it is keeping a large number of documents about the very same gold sales classified and inaccessible to the public due to the ‘sensitivity of the subject matter’. What could be so sensitive in the contents of these documents that the IMF has to keep them classified? Matters of national security? Matters of international security? And why such extremely high level security for an asset that was recently described by the august Wall Street Journal as a ‘Pet Rock’?

The secrecy of keeping these documents classified could hardly be because of sensitivity over the way in which the sales were executed by the agent, since this was already revealed in the February – May reports that are published, and which looks like a normal enough gold sales program by the Bank for International Settlements on behalf of the IMF? Could it be to do with the identities of the counterparties, i.e. the buyer(s) of the gold? I think that is the most likely reason.

Two counterparties that spring to mind that might request anonymity in the ridiculously named ‘on-market’ sales process would be a) the Chinese State / Peoples Bank of China, and b) a group of bullion banks that were involved in gold swaps with the BIS in 2009/2010.

Chinese discretion – Market Speculation and Volatility

Bearing in mind another one of the IMF’s mantras during the 2009-2010 gold sales processes that it wanted to “avoid disruption of the gold market”, and the Chinese State’s natural surreptitiousness, the following information reported by China Daily on 24 February 2010 (which was the first week of ‘on-market’ sales) is worth considering. The article, titled ‘China unlikely to buy gold from the IMF‘, stated the following:

“Contrary to much speculation China may not buy the International Monetary Fund’s (IMF) remaining 191.3 tons of gold which is up for sale as it does not want to upset the market, a top industry official told China Daily yesterday.

It is not feasible for China to buy the IMF bullion, as any purchase or even intent to do so would trigger market speculation and volatility,” said the official from the China Gold Association, on condition of anonymity.”

To me, these comments from the ‘anonymous’ China Gold Association official are a clear indication that if China was the buyer of the remaining 181.3 tonnes (ie. 191.3 tonnes – 10 tonnes for Bangladesh), then China certainly would have conducted the purchase in secrecy, as ‘it does not want to upset the market’, and any purchase or even intent to do so would trigger market speculation and volatility”

In the same China Daily article, there was also a comment reported from Asian Development Bank economist Zhuang Jian, who was in favor of China buying the IMF gold, as he thought that “buying IMF gold would not only help China diversify its foreign exchange reserves but also strengthen the yuan as an international currency”, and that China would “have a bigger say in the IMF through the gold purchasing deal”.

Zhuang Jian also stated that “China can start with small purchases on the international market like the 191.3 tons of IMF gold. In the short-term, the market will see volatility, but in the long-term the prices will return to normal”.

BIS Swaps and Bullion Bank Bailouts

In late June 2010, the Bank for International Settlements (BIS) published its annual report to year-end March 2009. This report revealed that the BIS had, during its financial year, taken on gold swaps for 349 tonnes. The Wall Street Journal (WSJ) initially reported in early July 2010 that these swaps were with central banks, however the BIS clarified to the WSJ that the gold swaps were in fact with commercial banks. The Financial Times then reported in late July 2010 that “Three big banks – HSBC, Société Générale and BNP Paribas – were among more than 10 based in Europe that swapped gold with the Bank for International Settlements.” Notice that two of the named banks are French banks.

Since the BIS refuses to explain anything material about these swaps, which was most likely a gold market fire-fighting exercise, the details remain murky. But the theory that best explains what actually happened was advanced by the late Adrian Douglas of GATA in early July 2010. Douglas proposed that bullion bank gold bailout tripartite transactions actually created the BIS gold swaps. Since IMF gold is stored at both the Bank of England vaults in London and at the Banque de France vaults in Paris, IMF ‘on-market’ gold held in Paris or London would be very easy to transfer to a group of bullion banks who all hold gold accounts at the Bank of England and, it now appears, also hold gold accounts at the Banque de France.

In May 2012, George Milling-Stanley, formerly of the World Gold Council, provided some insight to the publication Central Banking about the role of the Banque de France in being able to mobilize gold. Milling-Stanley said:

“Gold stored at the Bank of England vaults … can easily be mobilised into the market via trading strategies, or posted as collateral for a currency loan”

‘Of the Banque de France, Milling-Stanley says it has ‘recently become more active in this space [mobilising gold into the market], acting primarily as an interface between the Bank for International Settlements in Basel [BIS] and commercial banks requiring dollar liquidity. These commercial banks are primarily located in Europe, especially in France’.”

It’s interesting that two of the three banks named by the Financial Times as being involved in the BIS gold swaps are French, and that Milling-Stanley mentioned that most of the commercial banks that interfaced with the BIS are French banks. Given that the then Managing Director of the IMF, Dominique Strauss-Kahn, is French, as is his successor Christine Lagarde, could some of the ‘on market’ IMF gold sales been a case of the French controlled IMF bailing out French bullion banks such as SocGen and BNP Paribas?

Applied to the IMF gold sales, and under a tripartite transaction, as I interpret it, the following transactions would occur:

IMF gold is transferred by book entry to a set of bullion banks who then transfer the title of this gold to the BIS. The BIS transfers US dollars to the bullion banks who then either transfer this currency to the IMF, or owe a cash obligation to the IMF. The sold gold is recorded in the name of the BIS but actually remains where it is custodied at the London or Paris IMF Gold Depositories, i.e. at the Bank of England or Banque de France vaults.

In this scenario, the IMF gold could have been transferred to bullion banks and further transferred to the BIS during 2009, with the ‘on-market’ pricing exercise carried out during 2010. With the BIS as gold sales agent, the entire set of transactions would be even more convenient since the BIS gold trading desk would be able to oversee the gold swaps and the gold sales.

So, in my opinion, the IMF ‘on-market’ gold on offer was either a) bought by the Chinese State, or b) was used in a gold market fire-fighting exercise to bail out a group of bullion banks, or c) a combination of the two.

Modalities of Gold Sales

As to why the IMF paper “Modalities for Limited Sales of Gold by the Fund” (Sept 4th 2009) SM/09/243″ is under lock and key and can only be declassified by the IMF Managing Director Christine Lagarde, the conclusion is that it too must contain references to something that the IMF are extremely worried about allowing into the public domain. For the simple reason is that a similarly named IMF paper from 25 June 1999, titled “Modalities for Gold Sales by the Fund” (EBS/99/110)” is accessible in the IMF Archives, and while revealing in a number of respects, it hardly contains ‘sensitive material’. This paper was prepared when the IMF had been thinking about conducting gold sales back in 1999 which never materialized, except in the form of an accounting trick to sell to and simultaneously buy back a quantity of gold to and from Mexico and Brazil. This 1999 paper “Modalities for Gold Sales by the Fund” is very interesting though for a lot of reasons as it sketches out the limitations on IMF gold sales, the approaches to the sales that were considered by the IMF at that time, and it’s also is full of pious claims that the gold sales process should be ‘transparent’, such as the following:

“it will be critical to ensure transparency and accountability of the Fund’s gold operations through clear procedures for selecting potential buyers and determining prices, and through public disclosure of the results of the sales after they have taken place. The need for transparency and evenhandedness, which is essential for an international financial institution, argues for providing as much information as possible to the public.”

On the actual approaches to gold sales, the 1999 Modalities paper introduces the topic as follows:

“This paper considers four main modalities for the sale of gold by the Fund: (i) direct sales to another official holder of gold; (ii) placements into the market through a private intermediary or a group of intermediaries, such as bullion banks; (iii) placements into the market through the intermediation of a central bank with experience in gold sales or the BIS; and (iv) direct sales to the market through public auctions, as was the case with the gold sales by the Fund between 1976 and 1980″

 On the topic of publication of sales results, the 1999 paper states:

Publication of results: In all cases, the Fund would make public at regular, say monthly, intervals the quantity sold and the prices obtained, as well as, depending on the modality decided by the Board, the names of the buyers. In the case of a forward sales strategy involving an intermediary, the Fund would make public the quantities and delivery dates of the forward sales. It would be for consideration whether the Fund would announce the names of the intermediaries selected by the Fund to sell the gold, if that modality would be chosen”

On the topic of limitations to IMF gold sales, the 1999 paper says:

“Under the Articles, the Fund is only authorized to sell gold; that is, to transfer ownership over gold on the basis of prices in the market, taking into account reasonable transactions costs. The Articles prescribe the objective of avoiding the management of the price, or the establishment of a fixed price, in the gold market (Article V, Section 12 (a)). This implies that the Fund “must seek to follow and not set a direction for prices in the gold market.“

Under the Articles, the Fund cannot engage in gold leasing or gold lending operations, enter into gold swaps, or participate in the market for gold options or other transactions that do not involve the transfer of ownership over gold.”

A second shorter 1999 IMF paper on the modalities of gold sales, titled “Concluding Remarks by the Chairman Modalities of Gold Sales by the Fund, Executive Board Meeting 99/75, July 9, 1999, BUFF/99/81″ gave some indication on which approach (modality) the Executive Board were leaning to at that time to execute gold sales:

“Directors generally expressed the view that private placements of gold, either through a group of private institutions or through the intermediation of central banks or the BIS, had many advantages in terms of flexibility, both in terms of timing as well as in the discretion that the Fund’s agents could employ in the techniques that they could use to channel gold into the market.

And from the discussion, using the services of the BIS (or another central bank) appeared to be most favorable option:

“Directors further noted that there would be considerable practical difficulties in the choice of the institution or group of institutions through which the sales of gold could be conducted, even though these would be limited-but not entirely eliminated-by choosing a central bank or the BIS.

IMF Comedians

In conclusion, for sheer comedy reading,  there is a tonne of material in the IMF’s latest ‘transparency’ smoke and mirrors claims, dated 24 March 2016, which contains such comedy gems as:

Greater openness and clarity by the IMF about its own policies and the advice it provides to its member countries contributes to a better understanding of the IMF’s own role and operations, building traction for the Fund’s policy advice and making it easier to hold the institution accountable. Outside scrutiny should also support the quality of surveillance and IMF-supported programs.”

“The IMF’s efforts to improve the understanding of its operations and engage more broadly with the public has been pursued along four broad lines: (i) transparency of surveillance and IMF-supported programs, (ii) transparency of its financial operations; (iii) external and internal review and evaluation; and (iv) external communications.”

The IMF’s approach to transparency is based on the overarching principle that it will strive to disclose documents and information on a timely basis unless strong and specific reasons argue against such disclosure.” 

Again, what could these “strong and specific reasons” arguing “against such disclosure” be for the 2010 IMF gold sales?

By now you will begin to see that the IMF’s interpretation of transparency on gold sales diverges massively from any generally accepted interpretation of transparency. The IMF appears to think that merely confirming that a gold sale took place or will take place is the epitome of transparency, when it would more accurately be described as obfuscation and a disdain for actual communication with the public. IMF transparency is anything but transparent.

Perhaps the usually useless mainstream financial media may finally sit up and next time they bump into the IMF’s Ms Lagarde at a press conference, ask her why the IMF continues to block access to its 2010 gold sales documents, which remain classified due to, in the IMF’s own words, “the sensitivity of the subject matter”. Here’s hoping.

Central Banks’ secrecy and silence on gold storage arrangements

Whereas some central banks have become more forthcoming on where they claim their official gold reserves are stored (see my recent blog post ‘Central bank gold at the Bank of England‘), many of the world’s central banks remain secretive in this regard, with some central bank staff saying that they are not allowed to provide this information, and some central banks just ignoring the question when asked.

In the ‘Central bank gold at the Bank of England’ article, I said that “A number of central banks refuse to confirm the location of their gold reserves. I will document this in a future posting.” As promised, this blog post explains what I meant by the above statement.

Some of those central banks may have made it into the Bank of England storage list if they had been more transparent in providing gold storage information. However, since they weren’t transparent, these banks make it into the alternative ‘non-cooperative’ list. One subset of this list is central banks, which to be fair to them, did actually respond and said that they cannot divulge gold storage information. The other subset is central banks which didn’t reply at all when I asked them about their official gold storage location details.

The below list, although not complete, highlights 7 central banks and 1 official sector financial institution (the BIS), which, when asked where do they store their gold reserves, responded with various similar phrases saying that they could not provide this information. Between them, these 7 central banks claim to hold 1,500 tonnes of gold. Adding in the BIS which represents another 900 tonnes, in total that’s 2,400 tonnes of gold where the central banks in charge of that gold will not provide any information as to its whereabouts. Much of this 2,400 tonnes is no doubt stored (at least in name) at the FRBNY and the Bank of England, with some stored in the home countries of some of the central banks.

I have included the 8 responses below, but have deleted any references to individuals’ names or email addresses:


Bank of Japan: 765.2 tonnes of gold

Bank of Japan



Bank for International Settlements (BIS): > 900 tonnes of gold

  • BIS manages 443 tonnes of gold under custody for central banks
  • BIS owns 108 tonnes of gold itself
  • BIS manages 356 tonnes of gold deposits from central banks
  • BIS has 47 tonnes of gold swaps outstanding




Spain: 281.6 tonnes of gold

Banco de Espana




South Africa: 125.2 tonnes of gold




Thailand: 152.4 tonnes of gold

Bank of Thailand



Singapore: 127.4 tonnes of gold

Monetary Authority of Singapore



Malaysia: 37.9 tonnes of gold

Bank Negara Malaysia



Paraguay: 8.2 tonnes of gold

Banco Central Paraguay

…which translates into English as …..”That information is classified and cannot be disclosed. I hope you understand“.


‘No Answer’ central banks

I also emailed some central banks which didn’t respond to the question, ‘where are your gold reserves stored?’. They may not have responded for various reasons, including the emails may not have reached the relevant people who would normally be responsible for such matters. These banks account for another 500+ tonnes of gold reserves. Again, some of this gold is probably at the Bank of England, such as, some of Jordan’s and Kuwait’s gold, due to historical ties with the Bank of England.

  • Banque du Liban (Lebanon): 286.8 tonnes  (said to be in Lebanon and FRB New York)
  • National Bank of Kazakhstan: 208.1 tonnes
  • Central Bank of Kuwait: 79 tonnes
  • Central Bank of Jordan: 34.2 tonnes
  • Bank Al-Maghrib (Morocco): 22.1 tonnes
  • National Bank of Cambodia: 12.4 tonnes



BIS – Transparency in name only

The following slide, from a 2007 Bank for International Settlements presentation, shows how ridiculous the claims of central banks are when they use the meme that they are transparent and accountable, when in fact, they are nothing of the sort.

The BIS’ response above on the gold storage question, i.e. “the information that you have requested is not made publicly available” makes a mockery of its own claims in the below slide that central banks are required to be transparent and accountable.

The only ‘gold’ that the BIS is willing to discuss is its pie-in-the-sky corporate-speak ‘Golden Triangle’ of central bank Autonomy complimented by Transparency and Accountability when it states:

 – TRANSPARENCY – important for holding central bank to account

- ACCOUNTABILITY – crucial counterpart of autonomy in an open society, makes transparency more credible

 (I added the 2 red arrows to the slide to highlight these points)

BIS transparency



Conclusion: Finland’s change of heart

The fact that staff of some central banks won’t discuss that bank’s gold storage arrangements is no doubt an internal rule, or a storage depository rule, or some such nonsense. The nonsensical nature of their non-cooperation and evasion is highlighted by the below about-turn from the Bank of Finland, when in January 2013 it childishly told me that “We are not allowed to tell the exact depository, town or country“, and then 9 months later in October 2013, the powers-that-be at the gold depositories gave the go-ahead, for the Bank of Finland then spilled the beans, squealing that its gold was stored at a cornucopia of the usual suspects, namely, the Bank of England, the Federal Reserve Bank of New York, the Swiss National Bank, and smaller amounts at the Swedish Riksbank and the Bank of Finland.

Given that the Bank of England, the Federal Reserve Bank of New York, and the Swiss National Bank all agreed to the Bank of Finland’s request in 2013 to publish the individual storage locations of its gold, and given that the vaults of these 3 banks store the vast majority of internationally stored central bank gold, therefore it also makes a mockery of central banks which persists in claiming that they cannot divulge information on the storage of their own gold, which in most cases is supposedly spread between the very same 3 sets of vaults.

And after the Bank of Finland press release, which most Finns and most of the world probably didn’t even see, Helsinki and the world continued about its business as before. The point being that the storage locations of central banks’ gold reserves is not that big of a deal. Its only the central banks that make it into a big deal with their secrecy….unless of course, they are hiding something bigger, and the gold is not even where its supposed to be.

Bank of Finland – 31 January 2013

Bank of Finland January 2013


Bank of Finland – 25 October 2013

Bank of Finland

Central bank gold at the Bank of England

In a recent article, “How many Good Delivery gold bars are in all the London Vaults?….including the Bank of England vaults“, I considered how much gold is actually in the London Gold Market, and highlighted how the amount of gold stored in the London wholesale market has fallen noticeably in recent years.

That article highlighted that the amount of gold stored in custody at the Bank of England (BoE) fell by 350 tonnes during the year to 28 February 2015, after also falling by 755 tonnes during the year to end of February 2014. Therefore, by 28 February 2015, there was, according to the BoE’s own statement, £140 billion or 5134.37 tonnes of gold in custody of the BoE, or in other words ~ 410,720 Good Delivery gold bars.

The article also reviewed snapshots of the total amount of gold stored in the London vaults at various recent points in time.

Firstly, a reference on the London Bullion Market Association (LBMA) web site for a date sometime before 2013 stated that there had been 9,000 tonnes of gold (i.e. 720,000 Good Delivery bars) stored in London with two-thirds of this amount, or 6,000 tonnes, stored in the Bank of England (about 482,000 bars), and 3,000 tonnes stored in London ex Bank of England vaults (238,000 bars). (Nick Laird of Sharelynx subsequently pointed out to me that the earliest reference to this 9,000 tonne figure was from a LBMA presentation from November 2011.)

Secondly, by early 2014, the LBMA web site stated that there were only 7,500 tonnes of gold in all London vaults, i.e. ~600,000 bars, and of this total, three-quarters or 5,625 tonnes were at in Bank of England, ~ 450,000 bars, and only one-quarter or 1,875 tonnes was stored at LBMA London gold vaults excluding the Bank of England’s gold vaults.

So, the entire London market including the Bank of England had lost 1,500 tonnes (120,000 bars) between 2011 and early 2014, with 375 tonnes less in the BoE and 1,125 tonnes less in the London market outside the BoE.

Finally, on 15 June 2015, the LBMA stated that “There are ~500,000 bars in the London vaults, worth a total of ~US$237 billion”. This ~ 500,000 bars equates to 6,256 tonnes. (On 15th June 2015, the morning LBMA Gold Price was set at $1178.25, which would make $237 billion worth of gold equal to 201.145 million ounces, which is 6,256 tonnes).

Therefore, another ~1,250 tonnes of gold (approximately 100,000 Good Delivery bars) departed from the London gold vaults compared to the early 2014 quotation of  7,500 tonnes of gold in the London vaults.

So overall, between the 9,000 tonnes quotation in 2011, and the 6,256 tonnes 2015 quotation, some 2,750 tonnes (~ 220,000 Good Delivery bars) disappeared from the London gold vaults. With 6,256 tonnes of gold stored in the entire London vault network in 2015, and with 5,134 tonnes of this at the Bank of England, that would leave 1,122 tonnes of gold in London outside the Bank of England vaults.

To reiterate, “the London gold vaults“, in addition to the Bank of England gold vaults, refer to the storage vaults of JP Morgan and HSBC Bank in the City of London, the vaults of Brinks, Malca Amit and Via Mat (Loomis) located near London Heathrow Airport, the vault of G4S in Park Royal, and the Barclays vault managed by Brinks.

Because the Bank of England reveals in its annual report each year the value of gold it has stored in custody for its customers (central banks, international official sector institutions, and LBMA member banks), then it is possible to compare 3 years of gold tonnage figures, namely the years 2011, 2014 and 2015, and then show within each year how much of this gold is stored at the Bank of England, and how much is stored in London but outside the Bank of England vaults.

Nick Laird of www.sharelynx.com / www.goldchartsrus.com has done exactly this in the following sets of fantastic charts which he has created to graphically capture the above London gold trends, and a lot more besides. These charts are just a subset of a suite of inter-related gold charts that Nick has created to address this critical subject in the London Gold Market.

LBMA and BoE Holdings AU 01

Although the Bank of England is not a LBMA member, the Bank of England gold vaults are a critical part of the LBMA gold vaulting and gold clearing system, and LBMA bullion banks maintain gold accounts with the Bank of England which facilitate, among other things, gold lending and gold swaps transactions with central banks. Hence the above and below charts are titled “LBMA Vaulted Gold in London”.

LBMA and BoE Holdings AU 02

My “How many Good Delivery gold bars are in all the London Vaults” article had also quantified that nearly all of this ~1,122 tonnes consists of gold from physical gold-backed ETFs which store their gold in the London vaults. (previously rounded up to 1,125 tonnes for ease of calculation).

I had included 5 gold ETFs in my previous analysis namely, SPDR Gold Trust (GLD), Shares Gold Trust (IAU), ETF Securities – ETFS Physical Gold ETF (PHAU & PHGP), ETF Securities – Gold Bullion Securities (GBS & GBSS), and Source Physical Gold ETC (P-ETC), and also some smaller holdings at BullionVault and GoldMoney. In total these ETFs and other holdings accounted for just over 1,000 tonnes of gold in the London market.

However, I had missed a few other gold ETFs which also store their gold in the London vaults. Nick Laird, whose Sharelynx website maintains up-to-date gold ETF data and gold holdings, took the initiative to fill in the missing ETF blanks and Nick re-calculated the more comprehensive ETF holdings figures for London, which worked out at an exact 1,116 tonnes of gold, astonishingly close to the implied figure represented by the 1,122 tonnes outside the Bank of England vaults.

The additional gold backed ETFs also included in Nick Laird’s wider catchment were Deutsche Bank db Physical Gold ETC and associated Deutsche ETFs, ABSA gold ETF (of South Africa), Merk Gold ETF, and some smaller holdings from Betashares and Standard Bank. The following chart from Sharelynx shows the full data for physically backed gold ETFs storing their gold in London:

LBMA vaults ETF gold in London AU 06


We then discussed an approach, in conjunction with Koos Jansen and Bron Suchecki, to identify known central bank gold stored in the Bank of England vaults by tallying up this storage data on a country level basis. So, for example, assuming 5,134 tonnes of gold stored at the Bank of England in early 2015, the aim would be to try to account for as much of this gold as possible using central bank sources.

As mentioned in the ‘How many gold bars‘ article, the Bank of England stated in 2014 that 72 central banks (including a few official sector financial organisations) held gold accounts with the Bank. It is not known if any of these gold accounts are inactive or whether any of these accounts have zero gold holdings. The LBMA stated in 2011 that “The Bank of England acts as gold custodian for about 100 customers, including central banks and international financial institutions, LBMA members and the UK government”. Therefore there could also be more than 25 LBMA member commercial banks with gold accounts at the Bank of England.

Some of the Bank of England 5,134 tonne total would therefore be gold held in LBMA member bank gold accounts at the Bank of England, for which data is not public. Likewise, a lot of central banks do not reveal where their gold is stored, let alone how much is stored in specific vaults such as at the Bank of England and Federal Reserve Bank of New York.

However, many central banks have more recently begun to provide some information on where they say their official reserve gold is stored. Other central banks have always been to some extent transparent. Overall, a variety of sources, where possible, can be used to source locational data regarding central bank gold storage locations. There will continue to be gaps however, since some central banks remain non-cooperative, even when asked directly about where they stored their gold.

Tallying this type of central bank gold storage data will probably be a work in progress. However, there has to be a cut-off point for doing a first pass through the data, and this is a first pass. As a group, the European central banks have been especially forthcoming with gold storage data, compared to even 3-4 years ago (except for Spain). For other central banks, I looked in various places such as their financial accounts, and I contacted some of them by email with varying degrees of success.  About half of the 72 central banks on the Bank of England’s list were identified, again, with varying degrees of accuracy.

The following fantastic chart by Nick Laird captures an overview of this Bank of England gold storage data. Essentially the chart shows that the banks listed hold, or have stated that they hold, the respective quantity listed, and in total the named banks could account for x tonnes gold stored at the bank of England. This is labelled ‘Known Gold‘. Given ‘Known Gold’, this leaves the residual as ‘Unknown Gold‘.

Bank of England vaulted gold AU 03

The remainder of this article explains the logic and the sources behind each country, and why that country appears on the list. When a central bank claims to have stored gold at the Bank of England, or the evidence suggests that, it does not necessarily mean that the gold in question is held in custody in a gold set aside account or that it is allocated in identifiable bars, or even that it is actually there. Many central banks engage in gold lending, or have done so in the last 15-20 years, and have at times, or permanently, transferred control of that gold to LBMA bullion banks.

Until all central banks come clean about what form their gold holdings are in, which will never happen, then the amount of central bank gold that’s encumbered by bullion banks or under claims, liens, loan agreements etc will not be apparent.


Sweden holds 125.7 tonnes of gold, and 48.8%, or 61.4 tonnes are stored at the Bank of England.

Swedish Riksbank - distribution of gold reserves
Swedish Riksbank – distribution of gold reserves



Finland holds 49.035 tonnes of gold, and 51%, or 25 tonnes are stored at the Bank of England.

Bank of Finland - Distribution of gold reserves
Bank of Finland – distribution of gold reserves



Germany holds 3,384 tonnes of gold, and 12.9%, or 438 tonnes are stored at the Bank of England. The Bundesbank’s ongoing repatriation of gold from New York and Paris does not alter the amount of Bundesbank gold held at the Bank of England.

Deutsche Bundesbank - distribution of gold reserves
Deutsche Bundesbank – distribution of gold reserves



Austria hold 280 tonnes of gold, and 80%, or 224 tonnes are stored at the Bank of England.

Oesterreichische Nationalbank (OeNB) - distribution of gold reserves
Oesterreichische Nationalbank (OeNB) – distribution of gold reserves



Switzerland holds 1,040 tonnes of gold, and approximately 20%, or 208 tonnes are stored at the Bank of England.

Swiss National Bank - distribution of gold reserves
Swiss National Bank – distribution of gold reserves



Portugal holds 382.5 tonnes of gold (annual report 2014), and 48.7%, or 186.3 tonnes are stored at the Bank of England.

Banco de Portugal - distribution of gold reserves
Banco de Portugal – distribution of gold reserves



The following commentary about Denmark’s gold contains some key points on understanding how to identify which countries store gold at the Bank of England.

As of August 2015, Danmarks Nationalbank (the Danish central bank) holds 65.5 tonnes of gold.

In August 2015, the Nationalbank said that:

“Most of Danmarks Nationalbank’s gold is stored at the Bank of England, where it has been since it was moved for safety reasons during the Cold War. In March 2014, Danmarks Nationalbank inspected its stock of gold in the Bank of England.”

However, an earlier Nationalbank publication in 1999 said that 94%, or 62.7 tonnes was stored at the Bank of England.

Danmarks Nationalbank - location of gold reserves
Danmarks Nationalbank – location of gold reserves

Therefore, the assumption here is that 62.7 tonnes of Danish gold is stored at the Bank of England.

Note the Danmarks Nationalbank’s assertion that in order for gold to be lent it has to be moved to the London, since London is the centre of the gold lending market.

In 1999 “Almost 99 per cent, or 93 per cent of the Nationalbank’s total gold stock, had been lent.” The same 1999 Danish central bank article also said that:

Denmark gold lending BoE

I have underlined the above sentence since it’s of critical importance to understanding that in gold lending, central bank gold lent to LBMA bullion banks at the Bank of England does not necessarily move out of the Bank of England vaults. Lent gold may or may not move out the door, depending on what the borrower plans to do with the borrowed gold.

It also means that the total gold in custody figure that the Bank of England reveals each year (for example £140 billion in February 2015), consists of:

a) central bank gold stored at the Bank of England

b) bullion bank gold stored at the Bank of England

c) central bank gold that has been lent or swapped with bullion banks (gold deposits and gold swaps) and that has not been moved out of the Bank of England vaults. This category of gold is still in custody at the Bank of England. The central bank claims to still own it, the bullion bank has control over it, and the Bank of England still counts it as being in its custody.


The Netherlands holds 612.5 tonnes of gold, and 18%, or 110 tonnes are stored at the Bank of England.

De Nederlandsche Bank (DNB) - distribution of gold reserves
De Nederlandsche Bank (DNB) – distribution of gold reserves


United Kingdom

The UK gold reserves are held by HM Treasury within the Exchange Equalisation Account (EEA). EEA gold reserves totals 310.3 tonnes, and all 310.3 tonnes are stored at the Bank of England.


Notice that the UK gold reserves includes holdings of gold coin, as well as gold bars.



Ireland hold 6 tonnes of gold in its official reserves, a small amount of which is in the form of gold coins, but nearly all of which is in the form of gold bars stored at the Bank of England.

CB 1 Ireland

Recently, I submitted a Freedom of information (FOI) request to the Central Bank of Ireland requesting information such as a weight list of Ireland’s gold stored at the Bank of England. After the FOI request was refused and the Central Bank of Ireland claimed there was no weight list, I appealed the refusal and was provided with a SWIFT ‘account statement’ from 2010 that the Bank of England had provided to the Central Bank of Ireland. See below:

Central Bank of Ireland - gold bars at the Bank of England
Central Bank of Ireland – gold bars at the Bank of England

This statement shows that as of 31 December 2010, the Central Bank of Ireland held 453 gold bars at the Bank of England with a total fine ounce content of 182,555.914 ounces, which equates to an average gold content of 402.993 fine ounces per bar. It also equates to 5.678 tonnes, which rounded up is 5.7 tonnes of gold stored at the Bank of England.

The fact that no weight list could be tracked down is highly suspicious, as is the fact that Ireland had in earlier years engaged in gold lending, so did not, at various times in the 2000s have all of its gold allocated in the Bank of England. How a central bank can claim to hold gold bars but at the same time cannot request a weight list of those same bars is illogical and suggests there is a lot more that the Central Bank of Ireland will not reveal.



Belgium holds 227 tonnes of gold, most of which is stored at the Bank of England with smaller amounts held with the Bank of Canada and with the Bank for International Settlements. Banque Nationale de Belgique (aka Nationale Bank van België (NBB)) does not publish an exact breakdown of the percentage stored at each location, however, in March 2013 in the Belgian Parliament, the deputy Prime Minister and Minister for Finance gave the following response in answer to a question about the Belgian gold reserves:

Most of the gold reserves of the National Bank of Belgium (NBB) is indeed held with the Bank of England. A much smaller amount held with the Bank of Canada and the Bank for International Settlements. A very limited amount stored in the National Bank of Belgium.

Furthermore, there were a series of reports in late 2014 and early 2015 that would suggest that Belgium stores 200 tonnes of its gold at the Bank of England. Firstly, in December 2014, VTM-nieuws in Belgium reported that the NBB governor Luc Coene had said that the NBB was investigating repatriating all of its gold. See Koos Jansen article here.

On 4 February 2015, Belgian newspaper Het Nieuwsblad said that Belgium would repatriate 200 tonnes of gold from the Bank of England, but the next day on 5 February 2015, another Belgian newspaper De Tijd reported that NBB Luc Coene denied the repatriation report, and quoted him as saying:

There are other and more effective ways to verify if the gold in London is really ours. We have an audit committee that inspects the Belgian gold in the UK regularly”.

See another Koos Jansen article on the Belgian gold here.  However, Luc Coene did not deny the figure of 200 tonnes of Belgian gold stored in London.

Therefore, the assumption here, backed up by evidence, is that Belgium stores 200 tonnes of gold at the Bank of England.



Australia holds approximately 80 tonnes of gold in its official reserves, with 1 tonne on loan, and 99.9% of gold holdings stored at the Bank of England. See 2014 annual report, page 33.  According to a weight list of its gold held at the Bank of England, released via an FOIA request in 2014, Australia stores approximately 78.8 tonnes of gold at the Bank of England.

Reserve Bank of Australia


 South Korea

South Korea (Bank of Korea) holds 104.4 tonnes of gold, 100% of which, or 104.4 tonnes is stored at the Bank of England. The Bank confirmed this to me in an email on 11 September 2015. See email here ->

Bank of Korea (BOK) - location of gold reserves
Bank of Korea (BOK) – location of gold reserves


International Monetary Fund

The IMF currently claims to hold 2,814 tonnes of gold after apparently selling 403.3 tonnes over 2009 and 2010 (222 tonnes in ‘off-market transactions and 181.3 tonnes in ‘on-market transactions’). Prior to 2009, IMF gold holdings had been 3,217 tonnes, and had been essentially static at this figure since 1980 [In 1999 IMF undertook some accounting related gold sale transactions which where merely sale and buyback bookkeeping transactions].

Although the IMF no longer provide a breakdown of how much of its gold is stored in each location where it stores gold, the amount of gold held by the IMF at the Bank of England can be calculated by retracing IMF transactions from a time when the IMF did provide such details. In January 1976, the IMF held 898 tonnes of gold at the Bank of England in London, 3,341 tonnes at the Federal Reserve Bank of New York, 389 tonnes at the Banque de France in Paris, and 144 tonnes at the Reserve Bank of India in Nagpur, India. Therefore, of the IMF’s total 4,772 tonnes holdings at that time, 70% was stored in New York, 19% in London, 8% in Paris and 3% in India. See here and here.

In the late 1970s, the IMF sold 50 million ounces of gold via two methods, namely, 25 million ounces by ‘public’ auctions, and 25 million ounces by distributions to member countries.

In the four-year period between mid-1976 and mid-1980, the IMF sold 25 million ounces of gold to the commercial sector via 45 auctions. Thirty five of these auctions delivered gold at the FRBNY, 7 of these auctions delivered gold at the Bank of England, and 3 of the auctions delivered gold at the Banque de France.

Of the 7 auctions that delivered the IMF’s gold at the Bank of England, these auctions in total delivered 3.74 million ounces [Dec-76: 780,000 ozs, Aug-77: 525,000 ozs, Nov-77: 525,000 ozs, May-78: 525,000 ozs, Oct-78: 470,000 ozs, Mar-79: 470,000, and Dec 79:444,000 ozs], which is 116 tonnes. See IMF annual report 1980.

The IMF also sold 25 million ozs of gold to its member countries within four tranches over the 3 year period from January 1977 to early 1980. These sales, which were also called gold ‘distributions’ or ‘restitutions’ and covered between 112 and 127 member countries across the tranches, were initially quite complicated in the way they were structured since they involved IMF rules around quotas which necessitated the gold being transferred to creditor countries of the IMF and then transferred to the purchasing countries. In the later sales in 1979 and 1980 countries could purchase directly from the IMF.

Countries could choose where to receive their purchased gold, i.e. London, New York, Paris or Nagpur, however, the US, UK, France and India, which had the largest IMF quotas and hence the largest gold distributions, all had to receive their gold at the respective IMF depository in their own country. I don’t have the distribution figures to hand at the moment for the 25 million ozs sold to countries, but about 18 countries took delivery from the Banque de France in Paris, with the rest choosing delivery from New York and London.

Therefore an assumption is needed on the amount of gold the IMF ‘distributed’ to member countries from its Bank of England holdings between 1977 and 1980. Of the 25 million ounces distributed, the US received 5.734 million ozs, the UK received 2.396 million ozs (75 tonnes), France received 1.284 million ozs, and India received 805,000 ozs. Subtracting all of these from 25 million ozs leaves 14.78 million ozs which was distributed to the other ~120 countries. Since the IMF held 70% of its holdings at the FRBNY in 1976, 19% at the Bank of England and 8% at the Banque de France, apportioning these three weights to the remaining 14.78 million ozs would result in 10.76 million ozs (332 tonnes) being sold from the FRBNY, 2.867 million ozs (89 tonnes) from the Bank of England and 1.24 million ozs (38.5 tonnes) from the Banque de France.

Adding this 89 tonnes to the 75 tonnes received by the UK would be 164 tonnes distributed from the Bank of England IMF gold holdings. Add to this the 116 tonnes of London stored IMF gold sold in the auctions equals 280 tonnes. Subtracting this 280 tonnes from the IMF’s London holdings of 898 tonnes in January 1976 leaves 618 tonnes.

In 2009 the IMF said that it had sold 200 tonnes of gold to India, 2 tonnes to Mauritius, 10 tonnes to Sri Lanka,and then 10 tonnes to Bangladesh in 2010. The Bangladesh figures reflect its 10 tonne purchase. However, at the moment, there has been no exact confirmation that the 200 tonnes that India bought is in London. It probably is in London, but leaving this amount under the IMF holdings instead of in India’s holdings makes no difference. Subtracting the Bangladesh sale of 10 tonnes, and rounding down slightly, there are 600 tonnes of IMF gold (excluding the 2009 India 200 tonnes sale) stored at the Bank of England.

The IMF sales of gold to Sri Lanka and  Mauritius in 2009 of a combined total of 12 tonnes probably came out of the IMF’s London holdings also. The IMF’s sale of 181.3 tonnes of gold in 2010 via ‘on-market transactions’ may also have come out of the IMF’s London stored gold. These ‘on-market transactions” look to have used the BIS as pricing agent, and the IMF have gone to great lengths to hide the full details of these sales from public view. More about that in a future article.



The Reserve Bank of India holds 557.75 tonnes of gold. Of this total, a combined 265.49 tonnes are stored (outside India) at the Bank of England and with the Bank for International Settlements. In 2009 India purchased 200 tonnes of gold from the IMF via an ‘off-market transaction‘. A slide from this presentation sums up this information.

The questions then are, is the 200 tonne purchase from the IMF stored at the Bank of England, and how much of the earlier 65.49 tonnes is stored at the Bank of England.

Reserve Bank of India - gold held outside India
Reserve Bank of India – gold held outside India
A 2013 article in the Indian Business Standard which was reprinted from “Reserve Bank of India history series. Volume 4, 1981-1997, Part A”, explains that in 1991, the Reserve Bank of India entered 2 separate gold loan deals, one deal with UBS in Switzerland (which required 18.36 tonnes of RBI gold to be sent to Switzerland) and the other deal with the Bank of England and Bank of Japan (where 46.91 tonnes was required to be sent to the Bank of England). Together those 2 transactions equals 65.27 tonnes which is 0.222 tonnes short of the 65.49 total.
After the gold loan deals expired, it looks like 18.36 tonnes of Indian gold were left in Switzerland and transferred to safekeeping or deposit with the BIS, and 46.91 tonnes of Indian gold was left at the Bank of England.
Regarding India’s purchase of 200 tonnes of gold in 2009, the IMF only has gold 4 depositories, namely, the Bank of England, Federal Reserve Bank of New York, Banque de France, and the Reserve Bank of India in Nagpur, India. Given that the Indian gold stored abroad is “with the Bank of England and the Bank for International Settlements“, then for the 200 tonnes of IMF gold to end up being classified as ‘with’ the BIS, it would have to have either been transferred internally at one of the IMF depositories to a BIS account, or transferred via a location swap or a physical shipment to a BIS gold account at the vaults of the Swiss National Bank in Berne.
For now, the 200 tonnes of gold sold by the IMF to India in 2009 is reflected in the IMF holdings and not the India holdings. It does not make a difference to the calculations, since the 200 tonnes is still at the Bank of England.
Bulgaria has 40.1 tonnes of official gold reserves. The latest BNB annual report states that 513,000 ozs are in standard gold form, and 775,000 ozs are in gold deposits.
Bulgaria CB
In 2014, about 60% of Bulgaria’s gold was in gold deposits. These deposits are ‘stored’ in the Bank of England. Therefore approximately 24 tonnes of Bulgaria’s gold is at the Bank of England.

Bulgaria 2


Bank for International Settlements

The Bank for International Settlements (BIS), headquartered in Basle, Switzerland does not have run any gold vaults of its own. However, the BIS is a big player in the global central bank gold market, and it offers its central bank clientele gold safekeeping (and settlement) services using central bank vaults in London, New York and Berne. These services are possible because the BIS maintains gold accounts at the Bank of England, the Federal Reserve Bank of New York, and the Swiss National Bank in Berne. BIS gold accounts can act like omnibus accounts in that many central banks can hold gold in sub-accounts under a BIS gold account at each of these institutions in London, New York and Berne.

Gold can then be transferred around locations using gold swaps where one of the counterparties to the gold swap is the BIS.

BIS gold services to the global central bank market
BIS gold services to the global central bank market

The BIS is involved with gold in 3 main categories.

a) the BIS holds gold in custody for customers, off of the BIS balance sheet

b) the BIS has its own gold holdings which are classified as its gold investment portfolio, and which are on its balance sheet

c) the BIS accepts gold deposits from central banks. These gold deposits appear as a liability on the BIS balance sheet. Then the BIS turns around and places these gold liabilities in the market under its own name. These placing are also in the form of gold deposits and gold loans with other institutions including commercial banks. These ‘assets’ are then classified on the BIS balance sheet as BIS’ “gold banking” assets.

a) In its latest annual report, as of the end of March 2015, the BIS stated that it holds 443 tonnes of gold under earmark for its central bank customers on a custody basis. This gold is not on the BIS balance sheet. i.e. it is ‘off-balance sheet’ gold held by the BIS.

Bank for International Settlements - Off-Balance sheet gold in custody for customers
Bank for International Settlements – Off-Balance sheet gold in custody for customers
b) The BIS also holds 108 tonnes of its own gold (on balance sheet within an investment portfolio). This BIS gold is either kept in custody or transferred to bullion banks as gold deposits. The BIS does not provide granular data in its annual report as to how much of its own gold is ever put into gold deposits.
BIS 108
c) As of 31 March 2015, the BIS had 510 tonnes of gold assets on its balance sheet. Of this total, 108 tonnes was the BIS’ own gold, leaving 403 tonnes as banking assets (i.e. customer gold . Of this same 510 tonnes total, 55 tonnes were classified as gold loans, so 457 tonnes were not gold loans. If all 55 tonnes of gold loans were from customer gold, this would leave 348 tonnes of customer backed gold banking assets. On the same date (31 March 2015), the BIS held 356 tonnes of gold deposits from customers (sight deposits and short-term deposits) on the liability side of its balance sheet which originate entirely from central banks depositing gold with the BIS in sight and term deposits.
The question then is how to reflect BIS gold storage holdings at the Bank of England. While most if not all gold deposit transactions between central banks/BIS and bullion banks take place in London, the data is not readily published.
It was therefore decided, in the spirit of being conservative, to make an assumption on the BIS gold, and only use BIS customer custody gold and BIS own gold as inputs, and because BIS has gold accounts with 3 vaults (London, NY and Berne), to then just divide by 3 and say that one-third of BIS own gold and one-third of BIS ‘central bank custody gold’ is in London This would be 183.66 tonnes, i.e. (108+443)/3.
Therefore, this model states that 183.66 tonnes of BIS gold is stored in the Bank of England. This is probably being very conservative, especially given that no on-balance gold deposited by BIS customers is reflected in this figure.



Venezuela holds 361 tonnes of gold. All the Venezuelan gold is held in Caracas in Venezuela at the Banco Central de Venezuela except 50 tonnes are still stored at the Bank of England for transactions such as the gold swap with Citibank. See my article “Venezuela’s Gold Reserves – Part 2: From Repatriation to Reactivation“.



Bangladesh Bank (Central Bank of Bangladesh) holds 14 tonnes of gold, and 84.2%, or 11.8 tonnes are stored at the Bank of England.

Bangladesh Bank - distribution of gold reserves
Bangladesh Bank – distribution of gold reserves

In September 2010, the IMF sold 10 tonnes of gold to Bangladesh Bank, bringing total gold holdings up from 3.5 tonnes to 13.5 tonnes. The fact that this gold is stored at the Bank of England shows that the IMF sold this gold from its holdings that were stored at the Bank of England. (Note, Bangladesh has recently added some small amounts of domestic confiscated gold to its reserves).



Mexico’s central bank, Banco de Mexico (Banxico) currently hold 122.1 tonnes of gold.  At the end of 2012, Mexican official gold reserves totalled 4,034,802 ounces (125 tonnes), of which only 194,539 ounces (6 tonnes) was in Mexico, and 119 tonnes abroad.

According to a response from Banxico to Mexican economist Guillermo Barba, 99% of Mexico’s gold stored abroad is at Bank of England. So that  is 117.8 tonnes of Mexico’s gold stored at the Bank of England.

With Banxico now holding 122 tonnes according to the World Gold Council, and not 125 tonnes, the assumption is that the 3 tonne reduction came from domestic holdings.

Banxico - location of gold reserves
Banxico – location of gold reserves



Poland holds 102.9 tonnes of gold in its reserves. Poland’s central bank (Narodowi Bank Polski (NBP)) published a guide to Poland’s gold in 2014 in which it confirmed that nearly all of its gold is at the Bank of England. See pages 86-90 of the guide.

“How much gold did Poland possess before 1998? Approximately 746,463 ounces, of which almost 721 thousand was invested in deposits in commercial banks. In turn, the gold kept in the country was mainly coins, gold bars and various types of gold “scrap” bought by NBP.” (page 86)

Before 1998, only 25,463 ozs of NBP gold was kept in Poland, and 721,000 ozs (22.43 tonnes) was deposited with bullion banks. Poland then bought 80 tonnes of gold in 1998, bringing its gold reserves up to nearly 103 tonnes. The purchase was done as follows:

“…we used the services of a bank which constantly carries out similar transactions. Next, we made a location swap and the whole of NBP’s foreign gold reserves were deposited onto our account in the Bank of England.” (page 88)

It is likely that the NBP is referring to the BIS as the bank which purchased the gold on behalf of Poland, and then transferred it from one of the BIS gold accounts at the Bank of England to the NBP gold account at the Bank of England.

So that is 102.9 tonnes stored at the Bank of England.

Note also that, the Polish central bank explains that “It can be assumed that the gold that has been placed on the market at any time is precisely the gold that is held by the central banks in London“. In other words, central banks that have places gold on deposit (lent it) have done so with gold that they have stored in the Bank of England. See the following screenshot:

Narodowi Bank Polski - location of gold reserves
Narodowi Bank Polski – location of gold reserves

Note 6.1 on page 136 of the 2013 NBP annual report states:

“Gold and gold receivables The item comprises gold stored at NBP and deposited in a foreign bank account. As at 31 December 2013, NBP held 3,308.9 thousand ounces of gold (102.9 tonnes).

The annual report is a large file and slow to downlaod so its probably not worth downlaoding it http://www.nbp.pl/en/publikacje/r_roczny/rocznik2013_en.pdf

This statement about the “gold stored at NBP and deposited in a foreign bank account” has been in a few of the recent NBP annual reports. In April 2013, before the NBP had published the guide to its gold, I asked the NBP by email, based on the statement, to  clarify if the gold held abroad is held in custody, for example at the Bank of England or FRBNY or held in time deposits with commercial banks?”

The NBP responded: “Narodowy Bank Polski does not make gold time deposits with commercial banks”.

This may be true if the NBP is using sight deposits, but the 2013 answer, like so many other central banks currently, avoided providing any real information to the question.

Given that nearly all NBP’s 102.9 tonnes of gold was in the Bank of England when the 80 tonnes purchase was made in 1998, the assumption here is that still is the case, and that for simplicity, 100 tonnes of Poland’s gold is at the Bank of England.



Romania has 103.7 tonnes of gold in its official reserves.

National Bank of Romania - distribution of gold reserves
National Bank of Romania – distribution of gold reserves

In percentage terms, as at 31 December 2014, 27% of Romania’s gold was in ‘standard form’ which presumably means Good Delivery Bars (400 oz bars), 14% in gold coins, and 59% in ‘Deposits’ abroad. (59% of 103.7 tonnes is 61.2 tonnes)

Looking at earlier financial accounts, and going back to 2005/2004, the Romanian central bank held gold deposits with bullion banks, and gold deposits at the Bank of England, and the percentage of he gold in each of the 3 categories was very similar to 2014, specifically, in 2005 it was 32% in gold bullion in standard form, 13% in gold coins,and 55% in gold deposits.

Note the gold deposits with Bank of Nova Scotia and Fortis Bank Bruxelles in 2005 and additionally with the same two banks and with Barclays and Morgan Stanley NY in 2004.

National Bank of Romania 2005

Since the percentage breakdown between Romania’s bullion bank deposits (59%), standard bars (27%) and coins (14%) hasn’t varied much since 2005, and was at a similar mix over various years that I checked such as 2011 and 2014, the conclusion is that Romania has had more than  50% of its gold on constant deposit since at least 2004 (i.e. the original allocated gold is long gone).

The 2005 annual report also states that there were 61 tonnes of Romanian gold stored at the Bank of England. Since Romania had just under 105 tonnes of gold in 2005, this 61 tonnes was referring to the gold deposits, which central banks, as illustrated in numerous other examples, continue to count as their gold even though it has been lent to bullion banks.

Romania therefore had or has 61 tonnes of gold stored at the bank of England.

Note also the reference to central vault, which probably refers to a vault in Bucharest.



The Philippines hold 225 tonnes of gold in its official reserves. In November 2000, when the Bangko Sentral ng Pilipinas (BSP) held 225 tonnes of gold, it explained in a press release titled ‘Shipment of Gold Reserves‘ that it ended up storing 95% of its gold at the Bank of England due to the use of location swaps with a counterparty (probably the BIS) that took delivery of BSP gold, and transferred gold to the BSP account at the Bank of England.

Bangko Sentral Philippines - 95% gold at Bank of England
Bangko Sentral Philippines – 95% gold at Bank of England

Since 2000, the BSP gold reserves have risen, fallen, and risen again and now total 195 tonnes. Assuming the ‘95% of its gold’ storage arrangement is still in place, then the Philippines has 95% of 195 tonnes, or 185 tonnes stored at the Bank of England.



Greece claims to hold 112.6 tonnes of gold. In 2013, the Greek finance ministry on behalf of the Greek central bank stated that half of Greece’s gold reserves were ‘under custody’ of the Bank of Greece, and the other half was ‘under custody’ of the Federal Reserve Bank of New York (FRBNY), the Bank of England and (very vaguely) Switzerland. Who actually controls Greece’s gold reserves at this point in time is anybody’s guess.

Bank of Greece, locations of Greece's gold reserves
Bank of Greece, locations of Greece’s gold reserves

See my article from February 2015, titled “Spotlight on Greece’s Gold Reserves and Grexit” which explores Greece’s official gold reserves.

Given that the Federal Reserve Bank of New York was listed by the Greek MinFin as a foreign gold storage location ahead of the Bank of England, the assumption here is that of the 50% of Greece’s gold held abroad, the FRBNY holds more of this portion than the Bank of England. And so the assumption is that the Bank of England holds 40% of the foreign half, i.e. 20% of the total of Greece’s gold, with the FRBNY holding 50% of the foreign half. Taking 112 tonnes of gold as Greece’s total gold holding, 40% of this is 22.4 tonnes stored at the Bank of England. (Note, Greek gold reserves keep increasing incrementally each month by small amounts. As I am not sure what these increases relates to, a recent rounded figure of 112 tonnes has been chosen).



The Banca d’Italia holds 2.451.8 tonnes of gold. Although in 2014, the Banca d’Italia released a document in which it confirmed that some of this gold is held at the Bank of England, there is no evidence to suggest that Italy’s gold in London amounts to more than a few tonnes left over from 1960s transactions.

Bank of England gold set-aside ledgers show that in 1969 there were less than 1000 ‘Good Delivery’ gold bars in the Banca d’Italia gold account at the Bank of England, weighing less than 400,000 ozs in total. This is equal to about 12 tonnes. Most of the Italian gold at the Bank of England was flown back to Rome (and Milan) in the 1960s.

Since there is no public documentation that Banca d’Italia has ever engaged in gold lending (as far as I am aware), then there would be no need for Italy to keep a lot of gold at the Bank of England. Nearly all of Italy’s foreign held gold (over 1,200 tonnes) looks to be in New York (assuming it hasn’t been swapped or used as loan collateral). Italy could have engaged in non-public gold transactions from the Bank of England using gold location swaps from the FRBNY, or from Rome, but there is no evidence of this.

So, this model assumes 12 tonnes of Italian gold is stored at the Bank of England.



Brazil hold 67.2 tonnes of gold reserves. In 2012, Banco Central do Brasil told me by email that all of its gold reserves were in the form of ‘fixed term gold deposits at commercial banks only’. Since the gold would be required to be stored at the Bank of England for these gold deposit transactions to take place, Brazil therefore holds 67.2 tonnes of gold at the Bank of England. See email below:

Banco Central do Brasil - gold deposits
Banco Central do Brasil – gold deposits
Banco Central del Ecuador conducted a 3 year gold swap with Goldman Sachs in June 2014 where it swapped 466,000 ozs for US dollar cash This swapped amount of gold has been factored into the World Gold Council data for Ecuador, and the Ecuadorian reserves dropped by 14.5 tonnes in Q2 2014. from 23.28 tonnes to 11.78 tonnes. This swapped amount of 14.5 tonnes is most probably stored at the Bank of England, since Goldman Sachs proposed a similar deal with Venezuela in 2014 where the gold was required to be at the Bank of England for the swap to be initiated.
Bolivia Central de Bolivia holds 42.5 tonnes of gold, all of which is permanently on deposit with bullion banks. The Bolivian Central Bank is very transparent in explaining where its gold is ‘invested’. Hence, it has (until recently) even provided in its financial accounts, the names of the bullion banks which happened to hold its ‘gold deposits’ and the amounts held by each bank.
Banco Central de Bolivia
Banco Central de Bolivia
A recent Banco Central de Bolivia report for 2014 is less revealing and only shows the country distribution of the gold deposits, with 39% in the UK and the rest in France. While this probably refers to the headquarters of the actual bullion banks in question, i.e. Natixis is French etc, it could mean the gold is being attributed to the Bank of England and the Banque de France, so, a conservative approach here is to attribute 39% of 42.5 tonnes to the Bank of England, i.e. 16.6 tonnes stored at the Bank of England.
Banco Central de Bolivia
Banco Central de Bolivia
Peru holds 34.7 tonnes of gold in its official reserves.
At the end of December 2013, Banco Central de Reserva del Peru held 552,191 ounces (17 tonnes) of gold coins which were stored in the Bank’s own vault, and 562,651 troy ounces of “good delivery” gold bars (17.5 tonnes) which were stored in banks abroad, of which 249,702 ounces were in custody and 312,949 ounces in the form of short-term interest bearing deposits. See 2013 annual report.
Since the gold bars are all ‘good delivery’ bars (which is not the case at the FRBNY), and since Peru has still recently been engaging in gold lending, then the evidence suggests that 17.5 tonnes of Peru’s gold is stored at the Bank of England.
Peru CB

Latvia hold 6.62 tonnes of gold in its official reserves after joining the Euro on 1 January 2014 and after transferring just over 1 tonne of gold to the European Central Bank (ECB). All of Latvia’s gold is stored at the Bank of England, therefore Latvia stores 6.62 tonnes of gold at the Bank of England.

Before this transfer of gold to the ECB, Latvia had 248,706 ozs of gold, and it transferred 35,322 ozs to ECB, leaving 213,384 ozs.

Latvia CB

The latest annual report of the central bank of Latvia explains this transfer to the ECB.

Central Bank of Latvia - gold transfer to the ECB, 2014
Central Bank of Latvia – gold transfer to the ECB, 2014
European Central Bank
The ECB holds 504.8 tonnes of gold. This gold was transferred by the Euro members to the ECB at the launch of the Euro by 1 January 1999. All the ECB gold is de-centrally managed, meaning that it stays where it was when transferred and is still locally ‘managed’ by the bank which transferred that gold to the ECB. Some banks may have transferred gold stored at FRBNY in fulfillment of their requirement, some banks may have transferred gold at the BoE, and countries such as France and Italy may have transferred amounts which are still stored at Banque de France and Banca d’Italia etc. Some of the ECB gold, such as the smaller amount transferred by Latvia, is in the Bank of England. Other amounts of the ECB’s gold are most certainly also at the Bank of England in London.
It would be a separate project to track these transfers. The 1 tonne of Latvian gold transferred to the ECB at the start o 2014 was included in the figures here just as a placeholder, so as to acknowledge that ECB gold is at the Bank of England. Given that the Euro is a competing currency to the US Dollar, the ECB may have more gold than not stored in Europe and not at the Federal Reserve Bank of New York, since ECB gold would logically be safer not stored in the main Reserve Bank of a competing currency bloc.



Iceland holds 2 tonnes of gold reserves (precisely 63,831.46 ozs). Although the Bank of Iceland says that its gold is stored at the Bank of England and in its own vault also, nearly all the gold is stored at the Bank of England.

In its 2014 annual report, the Bank of Iceland said that “The Bank resumed lending gold for investment purposes in June 2014“, and “The Bank loaned gold to foreign financial institutions during the year”.

CB Iceland

The Bank of Iceland lent 99.7% of its gold during 2014 because this is the percentage of the gold reserves which are not payable on demand, but are payable in less than 3 months. See below screenshot.

Central Bank of Iceland - gold deposits
Central Bank of Iceland – gold deposits

For the purposes of this exercise, Iceland stores 2 tonnes of gold at the Bank of England.



Ghana’s central bank, the Bank of Ghana, holds 8.7 tonnes of gold in its official reserves (precisely 280,872.439 ozs). Of this total, 39.3%, or 3.42 tonnes is held at the Bank of England, with 27.5% at the Federal Reserve Bank of New York, and 29.5% with investment bank UBS. See 2014 annual report.

Interestingly, Ghana refers to its gold account at the Bank of England as a ‘gold set aside’ account, which is the correct name for a Bank of England gold custody account of allocated gold. Probably more interestingly is that most central banks do not use this ‘set aside’ term.

Bank of Ghana



A number of central banks refuse to confirm the location of their gold reserves. I will document this in a future posting. Some of the large holders undoubtedly hold quite a lot of gold at the Bank of England, as do a number of smaller holders. Countries that could fit into this category include Spain, France, Colombia, Lithuania, Sri Lanka, Mauritius, Pakistan, Egypt, Slovenia, Macedonia, Malaysia, Thailand and South Africa. In fact any central bank which has engaged in gold lending is a candidate for having some of its gold stored at the Bank of England.

Spanish people take note. Spain refused to say where its 281.6 tonnes of gold is stored, and Banco de España has the dubious record of being Europe’s least transparent bank as regards gold reserves storage locations. Maybe a project for Spanish journalists.

Banque de France keeps 9% of its 2,435 tonnes of gold reserves abroad, and has in the past engaged in gold lending. So this 9%, or 219 tonnes, is probably stored at the Bank of England.

The ECB and BIS  no doubt have more gold stored at the Bank of England than the figures currently reflect. This would also increase the ‘known gold’ total. Egypt is another country which has had a gold set aside account at the Bank of England so is in my view an obvious candidate for the list.

Adding to the known total is therefore a work in progress.

Spotlight on Greece’s Gold Reserves and Grexit

With the Greek Government and the Troika back in the news right now, it’s a good time to take a look at Greece’s official gold reserves and examine how much gold Greece claims to hold, where this gold might be located, and explore the impact that the European bailouts or a Greek Euro exit might have on the Greek gold holdings.

The 2012 Annual report of the Bank of Greece, the most recent full annual report available, provides some useful background on the Greek gold reserves. The Bank’s full 2013 annual report has not yet been posted on its website, and the 2014 annual report has not yet been published.

In the 2012 report, the Bank of Greece claims to hold on its balance sheet, ‘gold and gold receivables’ of 4,746,000 fine troy ounces (147.6 tonnes).

As of 31st December 2012, based on a gold price of €1,261.179 per fine ounce, this ‘gold and gold receivables’ asset item was valued in the balance sheet at €5.985 billion.

The 147.6 tonne total of gold reserves might seem a lot higher than figures of 112 tonnes or 117 tonnes that are sometimes quoted in economic statistics or in the media. However, the 147.6 tonne figure includes a claim, by the Bank of Greece on the Greek State, for gold that was paid by the Bank of Greece to the IMF (subscriptions and quota increases etc) on behalf of the Greek State.

As the 2012 annual report states:

“The amounts reported above comprise the Bank’s gold holdings (3,597 thousand ounces) and gold receivables from the Greek State (986 thousand ounces) corresponding to Greece’s participation in the IMF (the gold component of Greece’s quota has been paid by the Bank of Greece on behalf of the Greek State), as well as scrap gold and gold coins for melting (163 thousand ounces). A large part of gold holdings is kept with banks abroad.

(Source: ‘Notes on the balance Sheet’ 2012 Annual Report, Page 209 of the pdf, page A15 of the report).

Gold Claim on Hellenic Republic

Why the Greek State has never paid back this 986,000 oz gold debt to the Bank of Greece is puzzling, but there would appear to be little chance of the repayment happening any time soon given the Greek State’s current fiscal position.

Since Greece was one of the original members of he IMF back in 1945, the Bank of Greece gold claim on the Greek State may be a very long-standing claim and would comprise some or all of the initial gold subscription to the IMF in 1947, and various IMF quota increases that were implemented in 1958-59, 1965 and 1970.

I think it’s misleading for the Bank of Greece to throw in this gold claim against the Greek State within its “gold and gold receivables” line item in the balance sheet. Even though it is a receivable in gold, it is not even the type of gold receivable that the European central banks had in mind when they pressured the IMF back in 1999 to deem the “gold and gold receivable” classification device as a legitimate accounting approach. (See below for a background on that issue).

In my view this 986,000 Oz gold obligation on the Greek State should be itemised separately and not listed as part of the monetary gold holding line item. Where is this 986,000 Ozs of gold? It doesn’t even exist, except as a gold holding of the IMF and should not be double counted.

Excluding this 986,000 oz (30.66 tonnes) IMF related claim on the Greek State, the Bank of Greece says it holds a total of 3.76 million ozs of gold (3,597,000 ozs + 163,000 ozs) which is roughly 117 tonnes. Excluding the scrap gold and gold coins, the figure is 3.597 million ozs, which is approximately 112 tonnes.

The Fantasy of ‘Gold and Gold Receivables’

Note that the 3.76 million ounce figure from 2012, excluding the IMF gold claim, is still in itself ‘gold and gold receivables’ and not necessarily earmarked gold held. The percentage of ‘gold receivables’ within the 3.76 million ounce figure, such as gold lent or gold swapped, is not divulged.

The Bank of Greece uses the ‘gold and gold receivables’ gimmick because the Bank, along with all Eurosystem banks and most other central banks around the world, follows IMF central bank accounting guidelines when accounting for its gold holdings. And IMF accounting guidelines do not follow generally accepted accounting principles in this area.

In 1999, the IMF, following objections from European central bank officials at the Bank of England, Deutsche Bundesbank, European Central bank (ECB) and Banque de France, back-tracked on a plan to introduce individual line item categories for gold and ‘gold receivables’ in the reserves data template of its Special Data Dissemination Standard, because breaking out this data into separate items would have revealed the workings of the gold loan and gold swap market, or what the IMF calls ‘highly market sensitive’ information.

An IMF Executive Board paper from 1999, explains the issue:

“15. Central bank officials** indicated that they considered information on gold loans and swaps to be highly market-sensitive, in view of the limited number of participants in such transactions. Thus, they considered that the SDDS reserves template should not require the separate disclosure of such information but should instead treat all monetary gold assets, including gold on loan or subject to swap agreements, as a single data item. (page 6)

** The ‘central bank officials’ referred to above were as follows:

“7.  ……At the same time the (IMF) staff consulted the Bank of England, the Deutsche Bundesbank, the Banque de France, and the European Central Bank to review practical and methodological difficulties they might encounter in implementing the CGFS template, in light of recent decisions on publication of reserves data in the Eurosystem. (page 4)”

According to the latest IMF official reserves asset data for Greece,  the Bank of Greece now claims to have monetary gold holding of 3.62 million ozs, marginally up from 3.597 million ozs. In fact, the monthly foreign reserves figures for the Bank of Greece (xls) frequently show small increases in the ‘Monetary gold (millions of the troy ounces)’ category, about 9,000 ozs per year or slightly less than 1,000 ozs per month.

This increase in gold holdings could be reflecting interest in the form of gold received on gold deposits (gold loans) with bullion banks, and may suggest that the Bank of Greece has outstanding short-term gold loans that are being rolled over with the bullion banks (in the London gold market). Interest received on central bank gold deposits (time deposits) with bullion banks is often in the form of gold (accrued interest in gold).

Central Bank of Greece

Where is the Greek gold?

On the question of the location of the Bank of Greece gold reserves, the only locational information provided on the gold reserves in the 2012 annual report, was that ‘a large part‘ of the gold was held abroad.

Earlier Bank of Greece annual reports, from 2007 - 2010, state that “The largest part of gold holdings is kept in banks abroad.” It was only since 2011 that the wording ‘a large part is kept abroad‘ was introduced. Semantics maybe, however, the change in wording could indicate that some of the gold that was held abroad had been repatriated back to Greece sometime between 2010 and 2011. This was around the time that the Greek fiscal budget started to deteriorate rapidly.

Alternatively, the previous phraseology could have included the Bank’s IMF gold claim since by definition, this gold is held by the IMF in its gold despositories, which are all located outside of Greece. But it’s not clear from the wording whether the gold claim on the Greek State has ever been included or excluded from the reference to where the gold reserves were located.

Whatever the reason, it became less important on 1st March 2013, when Bloomberg published an article about the size and location of the Greek gold reserves. This article was based on a letter written by the Bank of Greece that had been forwarded by the Finance Ministry to a lawmaker in the Greek Parliament in response to the lawmaker’s query.

The letter stated that as of 31st December 2012, Greek gold reserves totalled 3.76 millon ounces (approximately 117 tonnes). This figure tallies with the figure from the above 2012 annual report.

On the location of the gold, Bloomberg said that, according to the document:

Half is held at the central bank in Greece while the remainder is held at the Federal Reserve Bank of New York, the Bank of England and in Switzerland.”

The same day, 1st March 2013, the Greek Ministry of Foreign Affairs and various Greek news agencies confirmed the Bloomberg story in slightly more detail, with the Ministry of Foreign Affairs releasing a statement stating that:

“Greece’s gold reserves totalled 3.760 million ounces at the end of 2012, worth 4.74 billion euros, the country’s central Bank of Greece (BoG) said on Friday.

In a report to Parliament, communicated through Finance Minister Yannis Stournaras responding to a question by parliament deputies over the country’s gold reserves, the central bank said that Greece’s natural gold reserves at the end of 2012 amounted to 3.760 million ounces, worth 4.74 billion euros, of which half were under the custody of the Bank of Greece and the remaining under the custody of the Federal Bank of New York, the Bank of England and Switzerland.

The central bank noted that gold reserves which had been transferred for custody to the Bank of England during the Second World War were repatriated gradually in 1946-1956.”

The Bank of Greece therefore appears to currently maintain a 50/50 split between domestic and foreign held gold. This again may suggest that something changed after 2010 which altered the wording of ‘the largest part’ of the reserves being stored abroad. Where the domestically stored Greek gold is held, I’m not sure. Possibly in a vault in the Bank’s headquarters in Athens. Who knows.

The Federal Reserve Bank of New York (FRBNY) and Bank of England as gold custodians for Greece’s gold is not surprising given that many foreign central banks store gold with these two institutions.

The Bank of Greece has historically had a gold set-aside account at the Bank of England, not least for the Tripartite Commission’s gold distributions. Separately, in the IMF gold restitutions to its members in the late 1970s, the Bank of Greece did not use the Bank of England or the Banque de France or the Reserve Bank of India to receive restituted gold, so this implies that Greece used the FRBNY and would have needed a gold account at the FRBNY.

The reference to Switzerland by the Greeks would either be a) a gold deposit or earmarked gold held with the Bank for International Settlements (BIS), b) earmarked gold held directly with the Swiss National Bank in Berne, or c) gold held with a Swiss commercial bank in Zurich such as Credit Suisse or UBS.

Swiss National Bank

As to how much of the 50% of the Greek gold that’s stored abroad is in each of the three storage locations (New York, London and Switzerland), or how much of this gold is actually earmarked in custody is unclear. Some or all of this gold could be loaned or swapped or, as central banks like to say in their gold legal agreements, the gold may have other “liens, claims or encumbrances” against it.

Given the perilous state of Greek finances, the custodial status of the Greek gold held with the Bank of England, FRBNY and in Switzerland deserves scrutiny. This would also apply to the 50% of the Greek gold that’s supposedly held by the Bank of Greece within Greece. This scrutiny will probably never be forthcoming however due to the unaccountability and lack of transparency on everything gold related within the world of central banking.

Seizing the Greek Gold? Not like Cyprus

In February 2012 during negotiations on Greece’s 2nd bailout (Second Economic Adjustment Programme of March 2012), the New York Times wrote an article quoting a Greek politician, Louka Katseli, who was unhappy that the loan deal undermined Greek sovereignty and believed that under the bailout deal, Greece’s creditors had a claim over the Bank of Greece gold reserves. As the NYTimes stated:

“Ms. Katseli, an economist who was labor minister in the government of George Papandreou until she left in a cabinet reshuffle last June, was also upset that Greece’s lenders will have the right to seize the gold reserves in the Bank of Greece under the terms of the new deal, and that future bonds issued will be governed by English law and in Luxembourg courts, conditions more favorable to creditors.”

According to the NYTimes, Katseli stated that:

“This is the first time ever that a European and probably an O.E.C.D. state abdicates its rights of immunity over all its assets to its lenders.

Although the NYTimes referred in its article to “the fine print of the 400-plus-page document — which Parliament members had a weekend to read and sign“, I am not sure which 400 plus page document was being referred to. I cannot find any reference to gold or gold collateral in the European Commission’s ‘Financial Assistance to Greece’ web pages, nor in the Commission’s “The Second Economic Adjustment Programme for Greece” document.

There isn’t, as far as I am aware, any collateral connection between the Bank of Greece gold reserves and the sovereign debt of the Greek State. I only say that because I can’t find the specific documentation that Katseli was referring to. However, Louka Katseli is a very credible source for making such a statement, having worked at a high level in the Greek Government, the OECD, and European Community, amongst other posts.

In comparison to the possible lack of Greek documentation, the Troika’s (ECB, IMF and European Commission) bailout deal of the Cypriot banking sector in 2013 (“The Economic Adjustment Programme for Cyprus”) did explicitly mention Cypriot gold and the possible sale of €400 million worth of gold, as follows:

27. The “programme” scenario takes into account a number of policy measures to strengthen debt sustainability, in particular (i) proceeds generated by privatisation of state-owned assets; (ii) the proceeds from the sale of excess gold reserves owned by the Republic of Cyprus;

29. Sale of excess gold reserves: It is envisaged to use the allocation of future central profits of approx. EUR 0.4 bn, subject to the principle of central bank independence and provided such profit allocation is in line with CBC rules and does not undermine the CBC duties under the Treaties and the Statute. This is estimated to generate one-off revenues to the state.

CBC is the Central Bank of Cyprus. But as the above ‘adjustment programme’ points make note of, Eurosystem central banks cannot be forced to sell their gold reserves to meet their government’s financing needs. This is due to Article 7 of the protocols on the European System of Central Banks (ESCB) and the ECB which states that the ECB and national central banks can’t seek or take direction from European Union government or institutions and, likewise, European Union governments and institutions are not allowed to influence the national central banks or the ECB.

The Central Bank of Cyprus never did sell any of its gold, but the rumours at the time, especially in April 2013, caused weakness in the gold price and were undoubtedly used by some as justification to accelerate the gold price weakness. Cyprus had, and still has, only 13.9 tonnes of gold and the sale proceeds from any Cypriot gold sale, would, like Greece, have only covered a small fraction of its bailout obligations to the Troika.

By December 2013, Reuters had released an article saying that Cyprus had “no plan to sell gold reserves to fund its €10 billion euro bailout”:

‘”We do not intend to sell the gold,’ a senior official at the central bank told Reuters, declining to be identified.”

“Asked about any alternative method to raise the 400 million euros, the official said: ‘They (the government) have to go back to the troika and say this (a gold sale) is not going to happen.'”

“While the Cypriot government had said sales would be considered, the central bank had typically been cool to the idea. The governor of the central bank would have the final say in such a sale, the central bank sources said.”

With Greek gold reserves eight times the size of those of Cyprus, any talk of Greek gold sales would be sure to have an adverse affect on the gold price. However, given that there does not seem to be any evidence that the Troika have discussed or planned for such gold sales, any suggestions of this in the media would be irresponsible.

dijsselbloem and varoufakis

Grexit and Greece’s gold claim on the ECB

In its balance sheet, the Bank of Greece also lists a claim on the European Central Bank under an item called “Claims equivalent to the transfer of foreign reserves to the ECB” (9.2).

In 1999, the founding member national central banks of the Euro (stage 3 of Economic and Monetary Union) transferred about €40 billion in foreign reserve assets to the ECB, with 85% of this total paid in US dollars and Yen and 15% paid in gold. There are now 19 European national central banks in the Euro, and Greece has a little less than a 2.8% share in the claims on this foreign reserve pool, 15% of which is in gold. The gold in this pool is managed on a decentralised basis by the member national central banks on behalf of the ECB.

In September 2011 (after the first Greek bailout [May 2010] but before the second Greek bailout [March 2012]), when fears of Greece leaving the EU were in full flight, I wrote to the ECB press office and asked them, in quite precise language, what would become of Greece’s gold contribution to the Eurozone if Greece exited from the Euro. My question to the ECB was as follows:

“In a scenario under which a Eurozone member state left the common currency zone, would the foreign reserve assets of that member state which had been contributed by that member state’s central bank to the ECB (i.e. the claims on the ECB established via Article 30 of the ESCB Statute, initially comprising 15% gold and 85% other currencies and subsequent top ups), be reimbursed to the departing members state’s central bank, or, given that a departing member state would most likely have been one to which the ECB had an outstanding loan (and so having a liability to the ECB), would the ECB seek to net the loan against the member state’s claims (made up of major currencies and gold)?”

The Communications Directorate of the ECB’s Press and Information Division promptly responded that:

Please note that there are no legal provisions for a hypothetical scenario of the kind you describe.

You may be interested in the following Legal Working Paper, although the views expressed in it do not necessarily reflect the views of the ECB:


The document that the ECB refered me to is titled Withdrawal and Expulsion from the EU and EMU – Some Reflections – by Phoebus Athanassiou, Legal Working Paper Series. No 10, December 2009.

Coincidentally, or not, Phoebus Athanassiou, the author of the paper, is Greek. According to his faculty profile at the Institute For Law And Finance (ILF) in Frankfurt, Dr Phoebus Athanassiou is “Senior Legal Counsel with the Directorate General Legal Services of the European Central Bank (ECB).”

Athanassiou also has an interesting connection to Cyprus since, according to the ILF profile, he “specialises in European Union, Greek and Cypriot financial law.” Prior to joining the ECB in 2004, Athanassiou “was in private practice, with the Athens Law Firm of Tsibanoulis & Partners, inter alia acting as consultant to the Government of the Republic of Cyprus on the transposition of the acquis in the fields of securities, banking and insurance law.” Acquis refers to Acquis communautaire, which just means the entire body of European laws (treaties, directives and regulations etc).

Athanassiou’s paper is very detailed and technical, and while there has been lots of coverage of it in the media over the last few years, the paper only discusses whether a country is allowed to exit the EU or exit EMU, not whether a departing country would get its gold back if it left EMU.

In summary, Athanassiou says in his 2009 paper:

– that before the Lisbon Treaty of 2007, there was no legal way for a member country to exit from the European Union (EU), and even though there is now (Article 50), it would be still legally problematic;

– that a member country of EMU (in the Euro) could not exit the Euro without exiting the EU;

– that “no right of withdrawal from EMU was ever intended to exist“;

– and that a member of the EU or EMU cannot be forced out because it requires the consent of all members including the member being expelled, i.e. “A Member State’s expulsion from the EU or EMU would inevitably result in an amendment of the treaties, for which the unanimous consent of all Member States is necessary under Article 48 TEU.”

Riot police stand near the euro sign in front of the European Central Bank headquarters during an anti-capitalist "Blockupy" demonstration in Frankfurt

Deal on the Table

With a Greek-Eurogroup deal now back on the table, the Athanassiou legal arguments still look to be sound. Just before the deal, there were reports of the ECB preparing for a Greek exit from the Euro. How this could even be legally undertaken is unclear. On 20th February 2015 Reuters reported that:

“The European Central Bank is preparing for the event that Greece leaves the euro zone and its staff are readying contingency plans for how the rest of the bloc could be kept intact, German news magazine Spiegel reported in a preview of its magazine.”

There is no legal way for a Euro member to exit the Euro. If it did somehow happen, a Greek exit from the Euro would have serious ramifications both financially and politically. Would the Bank of Greece also have to leave the ESCB group?

Anytime the prospect of Greece leaving the Eurozone flares up, there is always chatter that Greece would be somehow forced into selling its gold reserves.

Even though the European Central Bank Gold Agreements (CBGAs) on gold sales are supposedly not legally binding, the Bank of Greece gold holdings, worth less than €4 billion, are tiny in comparison to the colossal sovereign debts the Hellenic Republic faces, and would only make a small dent in the debt repayments.

The gold price should in theory benefit more from the financial volatility of a Grexit than it would suffer from the fear of Greek gold sales. However, the case of the feared Cypriot gold sales in 2013 shows that gold market players can use these fears to their advantage in pushing the gold price around.

If Greece stays in the Eurozone, which looks likely, it cannot independently sell its gold without the go-head of the ECB. This is because the ECB controls, or has a say in, the management of not just the gold transferred to it as part of the foreign reserve transfers of the participating national central banks, but all the monetary gold held as reserve assets by the member national central banks (under the ECB definition, reserve assets includes monetary gold).

Article 31 of the Statute of the ESCB and ECB, which addresses foreign reserve assets held by national central banks, says that beyond certain pre-existing obligations to various international organisations, “all other operations in foreign reserve assets remaining with the national central banks” are “subject to approval by the ECB in order to ensure consistency with the exchange rate and monetary policies of the Union.” So, any Euro member central bank would have to get the approval of the ECB before buying or selling any of its monetary gold.

In conclusion, Greece is not an insignificant holder of monetary gold. Its holding of 110+ tonnes makes it a reasonably sized gold holder amongst the world’s central banks. The supposed storage locations of Greece’s gold are not surprising but as to whether the gold is there and in what form the various holdings are is anyone’s guess.

Greece cannot just walk away from the Euro since such a scenario was never envisaged by the Eurocrates, and they will do whatever it takes to prevent such a scenario happening. As to whether Greece, or any Euro member, would get its gold back if it somehow managed to escape from the Euro, that is a scenario that as the ECB told me, “there are no legal provisions for.”