Gold-fix replacement talks, fears over the Greek exit, a gold slump as China takes a break from buying bullion and Belgium looks to repatriate its gold reserves. Here’s our roundup of February’s bullion news headlines.
Bullion news – Gold rush over Greece exit fears
February has seen investors clamouring to buy gold over concern that Greece may be about to leave (or be pushed) out of the Eurozone. So-called currency wars have led to many buying gold in other parts of Europe as well. For instance, after the Swedish central bank cut its interest rate to below zero at the beginning of February, many moved their money from bank accounts and into Bullion.
New gold-fix replacement talks
Chinese banks and the London Bullion Market Association (LBMA) were among those meeting to discuss a possible replacement for the century-old gold-fixing benchmark. No Chinese companies have ever directly participated in the 95-year-old price-setting ritual that takes place twice daily by phone between four different banks. But this could be set to change, with China potentially joining the fold. Many experts are saying this is unsurprising given that demand for gold in China has doubled since 2009. And in 2013, the country surpassed India as the largest Bullion buyer.
The new mechanism will be announced in March. You can read more about the ‘gold fix’ in our article here – what is the gold fix?
Gold price falls as China celebrates
China’s impact on the gold markets was further illustrated when the price of gold dipped for a day. The gold price fell on 18 February as China took a country-wide day off to celebrate a national holiday – the Chinese New Year celebrations.
Belgium looks to repatriate gold
The Central Bank of Belgium is reportedly planning on repatriating its 200 tonnes of gold, which sits with the Bank of England. The gold had originally been moved before WWII out of fear of Nazi theft in 1930s. The gold is speculated to be worth $7billion. Last year saw the German central bank, the Bundesbank, transfer 120 tonnes of gold. It is planning to continue transfers into 2015.
Russia bought $6billion of gold in 2014
The Russian Central Bank bought more than $6billion of Bullion last year, it has emerged. According to the news agency Reuters, Russia bought 152 tonnes of gold in 2014 in an attempt to diversify away from the US dollar. This 123% increase from 2013, meant Russia was responsible for almost one third of all Central Bank gold purchases.
God of Wealth Day sparks Bullion buying
The last day of February saw crowds of people lining up to buy gold Bullion in shops across Vietnam. Many retailers were forced to restrict how much they sold to each customer amid fears they would run out of bars. Many shops were caught unawares due to the new appetite for gold bars. In previous years, gold rings have been traditionally bought.