Swiss Gold Stored Internationally

There are increasing calls in Switzerland for transparency regarding the location of that country's remaining gold reserves. According to Bloomberg News, Swiss National Bank (SNB) spokesman Walter Meier said overnight that the bank stores its gold in so-called “decentralized” locations.

In recent years, the SNB has sold off a large share of its gold reserves.

There are deepening concerns in Switzerland about the debasement of the Swiss franc. The SNB has pegged the currency to the euro and is engaged in the same ultra-loose monetary policies as the Federal Reserve, BOE and the ECB. The SNB won't allow the franc to rise above an arbitrary “ceiling” against the euro, and SNB's Meier said on April 5 that the bank is ready to buy foreign currencies in "unlimited quantities."

Call For Transparency
Meier’s comments regarding the vastly depleted Swiss-gold reserves came after Bayram Dincer, an analyst at LGT Capital Management in Pfaeffikon, Switzerland, published a letter in the respected Swiss publication, Finanz und Wirtschaftcalled, calling on the SNB to disclose where its gold is stored.

Meier said that the SNB holds its physical gold reserves both “domestically and internationally, with provisions for a crisis scenario being a main factor in the decision for this decentralized storage”.

He continued, “The criteria for the storage countries are: appropriate regional diversification, exceptionally stable economic and political environments, immunity for central-bank investments, access to a gold market where stocks could be liquidated if necessary.”

He concluded by saying that, “...decentralized storage is preferable...factors can change over time and that’s why the central bank is reviewing...storage locations periodically.”

The SNB’s monetary policies have been imprudent in recent years and their gold sales have lost the Swiss people a lot of money.

Reserves Sharply Down
Switzerland holds 1,040.1 metric tons of gold, accounting for about 19% of its total reserves, according to the World Gold Council. That's down from 2590 tonnes prior to the SNB gold sales, which began in 1999. The sale of Swiss gold reserves cost the Swiss some $50 billon.

The country's GDP was $523 billion in 2011, so the SNB has lost some 10% of Swiss GDP due to the sale of a large part of its national patrimony -- their vitally important gold reserves.

Many Swiss are concerned that the remaining gold reserves may be stored in foreign jurisdictions (possibly less safe than Switzerland), which could nationalise or expropriate the gold in the event of financial, economic or currency crisis.

Hence the increasing calls of transparency regarding the exact locations of Switzerland's gold along with a growing chorus to repatriate the reserves back to Swiss soil.

Russian Gold/FX Reserves Rise To 523.3 Billion
Russia's gold and foreign-exchange reserves rose to $523.3 billion in the week through April 27, from $519.5 billion a week earlier, central-bank data showed on Thursday.     

The central bank provided the following figures (in billion dollars):   
-- Latest week            523.3                              
-- Previous week        519.5                              
-- End-2011                498.6     

The reserves include monetary gold, special drawing rights, reserve position at the IMF and foreign exchange. Russia continues to diversify its reserves and aggressively accumulate gold bullion.

As of the end of March, Russia had increased its reserves to 28.7999 million ounces, compared to 26.08 million ounces a year ago. That's an increase of 10.43% in the last 12 months alone. The risk of geopolitical tensions spilling over into currency wars remains high.

Other Gold News
(Reuters) -- Turkish-gold imports rose to 7.78 tonnes in April from 2.91 tonnes in March, according to data released by the Istanbul Gold Exchange on Wednesday.

In 2011, as a whole, imports amounted to 79.70 tonnes, almost doubling from 42.49 tonnes a year earlier.

(Reuters Global Gold Forum) -- CME notifies members of its clearinghouse that, starting Monday, they'll need to effectively double the initial margin collected for non-hedge trading positions, with no exception for members' customer accounts. The move is required by CFTC as part of Dodd-Frank. And while market participants have known about it for some time, CME apologized Wednesday for the "short notice" of the change. As per CFTC rules, hedges must reduce risk for commercial users of derivatives markets, linked to such a company's assets or liabilities.

(PTI) -- ING Vysya Bank enters gold coin retailing
Private sector lender ING Vysya Bank, today, entered the gold-coin retailing, announcing its plans to sell 24-carat coins of up to 10 grams.

The coins will be imported from Switzerland and sold at the Bangalore-headquartered bank's 149 branches, it said in a statement.

The coins will be offered in five-, eight- and 10-gram denominations, and will be sold based on international-bullion rates.

Outlining the bank's rationale for entering the fray, which already has a majority of lenders operating, the bank's country head for retail banking, Uday Sareen said, "gold as an asset class is a key alternate investment avenue for individual investors and also acts as a natural hedge against other asset classes. We have been seeing tremendous demand for this product."

India is the highest consumer of the yellow metal, accounting for 20 percent of the world's market. According to the World Gold Council, the country imported 966 tonnes of gold in 2011.