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DNB shifts gold to London
The Dutch central bank, De Nederlandsche Bank (DNB), said on Wednesday it had moved 86 metric tons of gold from North America to London over the past six months, aiming to be better prepared for a potential crisis amid rising geopolitical tensions.
“moved 86 metric tons of gold from North America to London over the past six months”
DNB said the transfer moved 27.5% of the gold it previously held in New York and Ottawa to the Bank of England, and it described London-held gold as “the world’s most easily tradable gold.”
DNB President Olaf Sleijpen said the move was meant “to strengthen our resilience and preparedness” even though the bank did not expect to use its reserves.
The operation did not change the Netherlands’ total gold holdings, which remained at 612.4 tons, and DNB said it combined selling and buying with physical transport to avoid melting gold bars.
Before the move, DNB held 31.3% of its gold in New York and 19.7% in Ottawa, while after the relocation it said London’s share rose to 32.1% and New York and Ottawa each fell to 18.5%.
How the transfer was done
DNB said it carried out the relocation by selling about 59 tonnes of gold in New York and then buying gold in London that met the Bank of England’s market standards.
In addition to the sale-and-purchase leg, DNB said “More than 27 tonnes of gold” was physically transferred from the United States and Canada to Zeist, and an equivalent quantity meeting international market standards was transferred from Zeist to London.
The bank said the final step avoided the need to remelt gold bars, and it described the approach as part of a risk diversification strategy for a “complex physical gold relocation operation.”
DNB also said it had improved the tradability of its gold reserves, adding that it expected it would “never need to use them” while still strengthening “resilience and preparedness.”
Devdiscourse reported that the transfer moved gold to the Bank of England, where BoE Governor Andrew Bailey said last year that “if you want to be involved in that market and you want to trade and use your gold, you really need to have it in London”.
Why it matters in a crisis
DNB said the relocation was driven by “increasing geopolitical unrest,” and it argued that gold held in London could be traded more easily than that held in New York and Ottawa.
“This makes it the quickest for DNB to deploy in a crisis situation”
Gulf News quoted DNB saying the step “has improved the deployability of the gold reserves,” and it added that DNB “assume[s] that we will never need to deploy the gold, but it is nevertheless necessary to strengthen our resilience and preparedness.”
The bank framed the change as improving speed and availability in a crisis situation, and it said gold stored in New York and Ottawa could not be utilized as quickly and directly as gold held with the Bank of England.
El País reported that the transfer involved 86 tons, described it as 14% of total reserves, and said DNB’s president Olaf Sleijpen stated: “But it is necessary to reinforce our resilience and preparedness.”
The same El País account said the Netherlands’ gold was kept in the Federal Reserve Bank’s vaults in Manhattan and in Canada’s central bank before the redistribution, while London’s share rose to more than 32%.