DNB adds more than 9 tonnes of gold reserves (update)

Update (3:21 p.m.): The Dutch Central Bank did not buy any gold. The central bank writes in a explanation that no change in the gold supply has been communicated to the IMF. How the IMF came up with this report, which was picked up by international media, remains unclear. The Dutch gold stock is therefore 612.5 tonnes.

The Dutch Central Bank added 9.61 tonnes of gold to its reserve in December, according to reports Reuters based on the latest figures from the IMF. It is the first time in sixteen years that the Dutch Central Bank has added gold to its reserves and the first time since 2008 that the size of the total gold stock has changed.

It is remarkable that the Netherlands is adding gold to its reserves, because in the past 25 years the DNB has actually sold a large part of its gold reserves. Nearly two-thirds of the 1,750 tonnes of gold available in the Netherlands in 1990 were put up for sale. In 2008, the sale of gold stopped, when only 612.5 tons remained.

Why the Dutch Central Bank is now buying gold again is hard to guess. Was it a mistake to sell so much gold until the outbreak of the financial crisis? Or has the central bank changed its mind because of the European debt crisis?

Central banks buy gold

Central banks have been net buyers of gold since 2009, but it has always been emerging market central banks that have been buying gold. European countries, which still have a relatively large amount of gold, were net sellers of gold until the outbreak of the financial crisis and have been neutral ever since.

The total Dutch gold reserve will grow to 622.08 tonnes as a result of the December purchase, as shown in the graph below. The value of the total Dutch gold stock is revalued monthly according to the current gold price in euros. At the end of December, our gold reserves were worth €19.58 billion, valued at a rate of almost €980 per troy ounce.

Repatriation of gold stocks

The first purchase of gold in 16 years is given extra weight by the fact that the Netherlands repatriated part of its gold reserves from the United States at the end of last year. In total, more than 120 tons were transferred from the gold vault of the New York Fed to the vault of the Dutch Central Bank at Frederiksplein in Amsterdam.

Dutch gold holdings since 1999 (click for a larger version)