Armenia wants to build up gold reserves

Armenia has private to build up a new gold reserve, reports the Armenian newspaper Haykakan Zhamank. According to the newspaper, the central bank will take on this task, although it remains unclear how much precious metal it will buy.

End of 2003 Sold the Armenian central bank increased its gold reserves of about 1.4 tons, as the central bank had a lot of confidence in the liquidity of the global gold market. In other words, she was convinced that she could easily buy back the gold at any time, because there was more than enough supply. Several European central banks Sold in those years hundreds of tons of gold.

Selling gold

At the time, the central bank had a lot of confidence in the euro and therefore saw no reason to hold precious metals in addition to foreign exchange reserves. She sold the gold for less than $400 per troy ounce and added the $17 million proceeds to her foreign exchange reserves, which totaled nearly $500 million at the time.

"The strong correlation between gold and the euro means that – even without gold in our international reserves – we can maintain the same level of diversification while increasing the return on our reserves."

Armenia wants gold reserves back

Armenia has apparently come to regret selling the gold after all, because since the outbreak of the financial crisis, the demand for the precious metal has increased spectacularly worldwide. Central banks have been net buyers of gold for seven years in a row now, while private individuals are increasingly Buy gold as an alternative form of wealth.

As a result of these developments, the supply of gold on the world market has become much tighter. Several European central banks therefore prefer to store their gold in their own country again. The Netherlands and Germany have already withdrawn hundreds of tons of gold from New York, and Austria withdrew some of its gold from the Bank of England. These developments undoubtedly played a role in Armenia's decision to build up yet another gold stockpile.

Rise in gold price

It is to be hoped that the Armenian central bank has made a good return with the proceeds of the gold , because a troy ounce of gold today costs more than $1,200. That's three times as much as at the end of 2003, when she sold everything.

The Central Bank of Armenia has, according to the latest Figures over $2 billion in foreign exchange reserves. If they wanted to convert 10% of that into precious metal, they would get just over 50 tons of gold in return at the current gold price.

Armenia wants to build up gold reserves