This Month in Gold – April 2015

Swiss Gold Exports to China & India Doubled
Bloomberg – Exports of Swiss-refined gold to China and India doubled in March to 46.4 metric tons and 72.5 tons respectively. This is the highest monthly data since January 2014, according to the Swiss Federal Customs Administration. Much of the gold is coming from the United Kingdom, which increased its Swiss exports sixfold last month. This is a continuation of a trend that started in 2013, when China and India began buying the gold sold by gold-backed funds that had attracted Western investors. These funds sold the largest amount of the metal in March since 2013, totaling 55.7 tons.
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China’s Gold Reserves May Have Tripled
Bloomberg – A new report from Bloomberg Intelligence estimates that since 2009, China may have tripled its gold reserves to a total 3,510 metric tons. The gold stockpiling is intended to diversify China’s $3.7 trillion of foreign-exchange reserves. Analysts suspect China may soon make its gold holdings public as it pushes to have its yuan currency added to the International Monetary Fund’s Special Drawing Right currency basket. Bart Melek of TD Securities said, “If you want to set yourself up as a reserve currency, you may want to have assets on your balance sheet other than other fiat currencies… [Gold is] certainly viewed as a viable store of value for an up-and-coming global power.”
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Venezuela Swaps Gold for $1 Billion
Financial Times – The central bank of Venezuela exchanged a portion of its gold reserves for $1 billion in cash with Citibank near the end of April. Venezuela swapped a total of 1.4 million ounces of gold, which was worth about $1.7 billion at the time of the exchange. Low oil prices have further weakened Venezuela’s struggling economy, which is facing 150% inflation this year and chronic consumer goods shortages. The gold will remain a part of the country’s foreign currency reserves, but Venezuela will pay interest on the money.
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Russia Buys Most Gold Since September
Bloomberg – Russia increased its gold reserves by about 1 million ounces to a total of 39.8 million ounces in March. This was Russia’s largest gold purchase since September, following a two-month hiatus during which it bought no gold. Russia has the fifth-largest gold reserves in the world and added to those reserves in each of the last 9 months of 2014. Since 2005, Russia has more than tripled its gold reserves. Mitsui & Co. analyst David Jollie said, “It’s interesting that Russia is still buying because it’s economy has taken a knock from Western sanctions and from lower oil prices… This sends a very bullish signal to the gold market.”
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