This Central Bank Sells More Of Its Gold, Bucking International Trends

(Kitco News) - While China is making headline for its insatiable appetite for gold, Canada is in the news for the exact opposite reason.

According to recent media reports, the Royal Canadian Mint, on behalf of the Government of Canada, has been selling what is left of Canada’s gold reserves. Quoting statistic from the Finance department, CBC reported that the nation’s gold holdings, mostly in coins, stood at 21,929 ounces, as of the end of January.

According to the data, Canada sold 41,106 ounces of gold in December and another 32,860 ounces in January. The article added that Canada’s gold reserve was worth $19 million at the start of the week.

The government’s recent coin sale is not surprising as Canada has a long history of indifference for the yellow metal. The country actually started selling off its gold reserves in early 2000s. Historical data from the World Gold Council (WGC) shows that by the end of 2000, Canada held 36.8 tonnes of gold, representing about 1% of its total foreign reserves.

By 20003 Canada would off load most of its gold within the next as reserves dropped to 3.4 tonnes. The data shows that Canada’s reserves were mostly stable for the next nine years. The Royal Canadian Mint started peddling what has been left of the government’s gold inventory in 2012.

Canada is one of the only western industrial nation that has been actively selling its gold, a stark contrast to the trend in China and Russia; IFM data shows that out of 100 countries, Canada is dead last for its gold holds while China and Russia are ranked fifth and sixth, respectively.  Last week, it was revealed that China continues to add to its gold holdings even as it other parts of its total foreign reserves at a record pace.

In its 2015 Gold Demand Trend report, the WGC noted that central banks were once again net buyers of gold for six consecutive years. The report cited official gold purchases at 588.4 tonnes, up 1% compared to 2014’s purchases of 583.9 tonnes.

“Economic and geopolitical risks continued to worry global markets,” the council said. “Central banks are keeping their foot firmly on the gold purchasing pedal.”

Many gold analysts have noted that China has been a significant gold buyer in an effort to make the yuan an attractive international currency.

Courtesy: Kitco News