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Dear Friend of GATA and Gold:
From the Financial Times today, appended here, is confirmation
from a gold establishment source of what GATA, the organization of supposedly
radical loonies, has been saying for a long time: The official data about
central bank gold reserves is bogus and often simply disinformation. (See http://www.gata.org/node/9545.)
The Financial Times reviewed diplomatic cables
obtained by Wikileaks and discovered that quite a
few central banks lately have been interested in getting gold quietly. The
newspaper quotes a leading respectable, the executive chairman of the
precious metals consultancy GFMS, Philip Klapwijk,
as acknowledging: "The totality of central bank reserves is not what is
reported to the International Monetary Fund. There's probably another 10 per
cent on top of that."
Klapwijk
must hope that the totality is only 10 percent. Why didn't he
tell his clients and the world before now that the official gold data wasn't
any good?
* * *
Iran Bought Gold to Cut Dollar Exposure
By Jack Farchy
Financial Times, London
Sunday, March 20, 2011
http://www.ft.com/cms/s/0/cc350008-5325-11e0-86e6-00144feab49a.html
Iran has bought large
amounts of gold in the international market, according to a senior Bank of
England official, in a sign of how growing political pressure has driven
Tehran to reduce its exposure to the US dollar.
Andrew Bailey, head of
banking at the Bank of England, told an American official that the central
bank had observed "significant moves by Iran to purchase gold,"
according to a US diplomatic cable obtained by WikiLeaks
and seen by the Financial Times.
Mr. Bailey said the
gold buying "was an attempt by Iran to protect its reserves from risk of
seizure."
Market observers
believe Tehran has been one of the biggest buyers of bullion over the past
decade after China, Russia, and India, and is among the 20 largest holders of
gold reserves.
They
estimate that it holds more than 300 tonnes of
gold, up from 168.4 tonnes in 1996, the date of the
most recent International Monetary Fund data.
The cable, dated June
2006, is the first official confirmation of Tehran's buying.
Last year central
banks became net buyers of bullion after 22 years of large sales, helping
drive gold prices to all-time nominal highs. Trades by central banks are
often kept secret.
Bankers said other
Middle Eastern countries had also been quietly adding to gold holdings to
diversify away from the dollar amid political tensions and volatility in
currency markets.
"The totality of
central bank reserves is not what is reported to the IMF," said Philip Klapwijk, executive chairman of GFMS, a precious metals
consultancy. "There's probably another 10 per cent on top of that."
Cables obtained by WikiLeaks cite Jordan's prime minister as saying the
central bank was "instructed to increase its holdings" of gold, and
a Qatar Investment Authority official as saying the QIA was interested in
buying gold and silver.
"There is no
question some Middle Eastern countries are very interested in buying
gold," said George Milling-Stanley, head of government affairs at the
mining industry-backed World Gold Council.
In the past two
months, the political unrest in the Middle East has helped propel gold to a
record price of $1,444.40 a troy ounce.
The Bank of England
declined to comment on the cables but did not dispute their contents. The
central banks of Iran and Jordan and the QIA did not respond to requests for
comment.
-----
Additional reporting by Najmeh
Bozorgmehr in Tehran.
Chris
Powell
Gold
Anti-Trust Action Committee Inc.
* * *
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