The Dutch central bank shifted the location of 78 metric tons of gold, worth $11 billion at today’s prices, from vaults benefotath the streets of Manhattan to London, saying it would improve the ability to trade the metal in a pinch.
The high-security operation took several months to pull off. Some of the gold was sold in the U.S. and repurchased in the U.K. Other bars were flown to Europe, likely in the storage hold of planes. The result: Almost a third of the Dutch gold reserve is in London and a still chunky 19% in New York, flipping their earlier positions.
Most Read from The Wall Street Journal
“In view of increasing geopolitical unrest, DNB is strengthening its crisis preparedness,” the central bank said in a statement referring to its Dutch acronym. The central bank also moved some gold from vaults in Canada.
“We expect that we will never need to use them, but we do need to strengthen our resilience and preparedness,” said DNB President Olaf Sleijpen.
The bank didn’t specify what it meant by geopolitical unrest. The move follows 18 months in which relations between the U.S. and Europe have frayed over tariffs, President Trump’s threats to seize Greenland and his equivocation over America’s military backing.
Gold’s place as the backbone of global finance ended with the demise of the Bretton Woods monetary system in the 1970s. But central banks kept hold of some gold as part of reserves they could sell to defend their currencies if they came under strain.
After a long decline, central banks started adding to their gold holdings again around the time of the 2008 financial crisis, according to a 2023 paper by the International Monetary Fund. Since then, proliferating sanctions have encouraged many central banks—notably Russia’s—to stock up on gold in case the U.S. cut them off from its banking system.
Many central banks, including the Dutch, spread their gold eggs in different baskets around the world to keep them safe. New York and London are the two main centers for gold trading.
The Fed keeps gold 50 feet below sea level on Manhattan Island bedrock strong enough to support the weight of hundreds of thousands of bars. Security is so tight, three people need to be present even to change a lightbulb.
Source: finance.yahoo.com
