After Dutch 122,5 t gold repatriation, will next a global run on gold ?

The Dutch central bank said Friday it is repatriating some of its gold reserves from the U.S., making it the latest central bank in Europe to address public concerns about the safety of its gold.

Source: the WGC, DNB

Source: the WGC, DNB

According The Wall Street Journal, De Nederlandsche Bank (DNB) said it is moving in utmost secret some of its reserves of 612 metric tons back to the Netherlands in an effort to spread its gold stock in “a more balanced way”. The measure could have “a positive effect on public confidence” it said.

After this move, the central bank’s gold reserves held at the New York Federal Reserve will fall to 31% from 51%

The goal is to keep 31% of its reserves at the central bank’s vaults in Amsterdam, compared with 11% previously. As a result, the central bank’s gold reserves held at the New York Federal Reserve will fall to 31% from 51%. Dutch gold held at central banks in Canada and the U.K. will remain unchanged at 20% and 18%, respectively.

We remember that several central banks in Europe have made similar moves in recent years in an effort to quell fears about the safety of their gold reserves that were spurred by the debt crisis in the eurozone.

In early 2013, Germany’s central bank said it would repatriate some of its reserves from the U.S. and France, bowing to pressure from Berlin and a campaign by the populist press. About a similar request was speaking Finland.

Switzerland, meanwhile, is bracing for a vote on Nov. 30 that would require the Swiss National Bank to hold a fifth of its assets in gold and force it to repatriate its gold reserves held in the U.K. and Canada.

The impact of the Dutch gold repatriation can be huge. First of all, because it underlines more and more countries are getting nervous about their gold reserves stored in the US. Venezuela repatriated most of its reserves from abroad in 2012, the year Germany also announced a repatriation schedule from the US and France. While Germany settled with the US to ship 300 tonnes spread over 8 years, the Dutch set a new trend to insist on immediate delivery. If more countries will follow this trend there can be a global run on gold.

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