German Federal auditors handed in a report slamming the Bundesbank for not inspecting their foreign held gold reserves to verify their book value. The report says the gold bars “have never been physically checked by the Bundesbank itself or other independent auditors regarding their authenticity or weight.” Instead, it relies on “written confirmations by the storage sites.”  The lion’s share of Germany’s gold reserves (nearly 3,400 tons estimated at $190 billion) are housed in vaults of the US Federal Reserve, the Bank of England and the Bank of France since the post-war days, when they were worried about a Cold War Soviet invasion. The Bundesbank stated, “There is no doubt about the integrity of the foreign storage sites in this regard”. In contrast with best industry practices Germany’s gold reserves do not seem to be independently verified by a third party. Philipp Missfelder, a politician from Merkel’s own party, has asked the Bundesbank for the right to view the gold bars in Paris and London, but the central bank has denied the request, citing the lack of visitor rooms in those facilities, German’s daily Bild reported. The Bundesbank won’t let German parliament members inspect the German gold vaulted abroad because the central bank vaulting facilities supposedly lack “visiting rooms. And yet one of those vaults, the Federal Reserve Bank of New York, offers the public tours that include “an exclusive visit to the gold vault”.

 

From Goldcore:

Today’s AM fix was USD 1,717.00, EUR 1,317.22, and GBP 1,072.12 per ounce.
Yesterday’s AM fix was USD 1,725.00, EUR 1,321.03, and GBP 1,075.10 per ounce.

Silver is trading at $31.80/oz, €24.52/oz and £19.95/oz. Platinum is trading at $1,590.25/oz, palladium at $605.25/oz and rhodium at $1,125/oz.

Gold climbed $6.40 or 0.37% in New York yesterday and closed at $1,728.50. Silver hit a high of $32.434 and finished trading with a gain of 1%.

Gold edged down on Tuesday, in tandem with equities that relinquished gains, however demand from jewellers supported prices as investors await the policy statement from the US Federal Reserve meeting to be released on Wednesday at 18:15 GMT.

No major announcements are expected to come out of the meeting.  Last month the Fed committed to hold rates low even after the economic recovery has strengthened. This was the signal that indicated it will continue intervening until the economy grows fast enough to decrease US unemployment sharply.


XAU/EUR Currency 3 Days – (Bloomberg)

The euro remained firm against the dollar as the market expects Spain to apply for a bailout within the next month.  Now that Spain’s regional elections are complete and with Spain’s Prime Minister Rajoy’s People’s Party winning 41 out of 75 seats in the Galician assembly this affirmed the approval of financial austerity measures and paves the way for a formal bailout from the EU.

Spain’s central bank announced this morning that the Spanish economy contracted at a faster pace in Q3 (1.7% vs. 1.3%) and that the country may miss its budget-deficit target because of tax-revenue shortfalls.

In India, demand for the yellow metal climbed overnight after a rebound in the rupee discounted prices by 1%.

German Federal auditors handed in a report slamming the Bundesbank for not inspecting their foreign held gold reserves to verify their book value.

The report says the gold bars “have never been physically checked by the Bundesbank itself or other independent auditors regarding their authenticity or weight.” Instead, it relies on “written confirmations by the storage sites.”

The lion’s share of Germany’s gold reserves (nearly 3,400 tons estimated at $190 billion) are housed in vaults of the US Federal Reserve, the Bank of England and the Bank of France since the post-war days, when they were worried about a Cold War Soviet invasion.

The Bundesbank stated, “There is no doubt about the integrity of the foreign storage sites in this regard”.

In contrast with best industry practices Germany’s gold reserves do not seem to be independently verified by a third party. GoldCore Gold Bullion Services offers clients secure storage accounts in Zurich, London, USA and Hong Kong, with independent verification of all client stored assets.

Philipp Missfelder, a politician from Merkel’s own party, has asked the Bundesbank for the right to view the gold bars in Paris and London, but the central bank has denied the request, citing the lack of visitor rooms in those facilities, German’s daily Bild reported.

The Bundesbank won’t let German parliament members inspect the German gold vaulted abroad because the central bank vaulting facilities supposedly lack “visiting rooms.” And yet one of those vaults, the Federal Reserve Bank of New York, offers the public tours that include “an exclusive visit to the gold vault”.


Cross Currency Table – (Bloomberg)

With German elections around the corner (and this a politically sensitive issue) the central bank decided last month to repatriate about 50 tons of gold per year over the next 3 years from New York to its headquarters in Frankfurt for “thorough examinations” regarding weight and quality, the report revealed.

The auditor’s report stated that the German Central Bank’s gold in London has dropped “below 500 tons” due to recent sales and repatriations, but it did not specify how much gold was held in the U.S. and in France. German media have widely reported that some 1,500 tons — half of their total is stored in New York.

The lack of an announcement of the sale of the German gold in London suggests that the sale was actually part of a gold swap with another central bank — like the New York Fed. The only question is the lack of transparency surrounding the fall in London.  Was German gold sold at the behest of the US and in exchange Germany took title to US gold vaulted in the New York? Or was title to gold supposedly vaulted in the United States?

German economists have led a rally to “bring home our gold” and the news article listed below was circulated by the AP.

 

NEWS
Gold holds above $1,720, Fed in focus – Reuters

Gold Poised to Decline Before Fed Policy Meeting; Silver Falls – Bloomberg

Fed likely to send wait-and-see signal at meeting – Huffington Post

COMMENTARY
Unease about Germany’s unchecked gold reserves – Associated Press

Japanese Government Demands BOJ Do QE 9 One Month After Failed QE – Zero Hedge

  1. Up to July this year the US exported 424 tonnes of gold to London/Switzerland and Hong Kong which is only 64 tonnes below the total gold exported for 2011. This year Australian gold exports to China have increased 900%. Imports of gold through Hong Kong could finish at 750 tonnes by the end of the year if the current rate is maintained. Clearly demand for physical gold is massive before even talking about India, Russia, the rest of Asia, Middle East. Eventually the Western Central Bankers will have their “Emperor has no clothes moment” when the world discovers that all they are holding are paper gold promises with the physical metal long gone.
    However the real immediate concern for the banksters would have to be the physical silver market. With silver no central banks have any physical silver reserves to dump on the market. It is now only 5-6 weeks before first day notice on the Dec 12 Silver Contract. Open interest for the December delivery month is 83002 contracts or 415 million ounces. Open Interest has hardly dropped at all even though the silver price has declined over $3. This is because the big investors know that the bullion banks hardly have any physical silver at all. These banksters must be crapping their pants. December will be very interesting.

    • If the gold is actually gone it is going to start a flood of requests from every country that is supposed to have gold stored here. This could start a war if enough countries gold is missing.

    • If that happens, there would be an economic crisis or even its collapse. USA is going to be the center of it and it will suffer the most. The further you stay far from the center, the less you are going to feel the effects of it. For example, Canadians are going to feel the effects of it more than the Chinese.

  2. Wait, German’s own bank won’t let the German parliament check German’s gold? This is wrong! Germany should’ve kept its gold at its possession so that way, it won’t have any delivery problems. That’s also one good example of “If you don’t hold it, you don’t own it!”

Leave a Reply