The Dutch Central Bank confirmed that between March and August, 86 tons of gold were transferred from New York and Ottawa to London. Foreign media reported that this adjustment occurred against the backdrop of increased volatility in the U.S. Treasury market and ongoing geopolitical tensions, which has led the market to attribute it with significance beyond its purely logistical purpose.
The Dutch central bank refers to it as enhancing crisis response capabilities.
The Dutch central bank stated that the reason for adjusting the location of gold storage is due to "increasing geopolitical turmoil," as it is necessary to be able to utilize gold more quickly in times of severe crises. The bank mentioned that the gold held at the Bank of England is considered one of the most easily tradable forms of gold globally, making it more convenient to mobilize in emergency situations.
The Dutch central bank also stated that not all of the gold stored in New York and Ottawa has been withdrawn. With a total gold reserve of 612 tons, 18.5% of it is still remaining in North America.
London has higher liquidity, making it more difficult to directly access gold in North America.
According to the Dutch Central Bank, keeping gold in London is mainly due to liquidity considerations, rather than simply changing the proportion of gold holdings. After all, gold remains gold, and the transfer of its storage location does not directly affect the supply and demand in the foreign exchange market or the gold market.
Foreign media quoted Paul Donovan, Chief Economist for UBS Global Wealth Management, as saying that such cross-regional adjustments made to enhance the tradability of gold are not common. Donovan believes that the direct impact at the market level is nearly zero, but what they release are more sensitive signals regarding trust and the international reputation of the United States.
U.S. debt and safe-haven status once again under discussion
The report also mentioned that in March of this year, the French Central Bank sold 129 tons of gold stored in New York and repurchased it in Europe. At that time, the French side gave the reason as improving the purity of the gold, without directly attributing the decision to geopolitical risks. However, in the current context, as the European Central Bank continues to transfer some of its gold back from the United States to Europe, it is still likely to trigger speculation from the outside world.
Recently, a series of actions by the U.S. Treasury Department have also drawn more attention to the risk premium of U.S. Treasury bonds in the market. Reports mentioned that U.S. Treasury Secretary Janet Yellen was accused of interfering with the trend of the Japanese yen last month, and subsequently announced a series of U.S. debt repurchase operations to lower yields and ease the tightening of financial conditions.
Just a few weeks after the U.S. national debt surpassed $40 trillion, fiscal prospects have once again become a focal point for the market. The article argues that although there is no sign of severe disorder in the bond market at present, as some international institutions begin to adjust where they hold their most core safe-haven assets, the United States' long-standing status as a "safe haven" is facing greater scrutiny.
