Two years ago Banxico bought 100 tons of gold, and in 2012, added 20 more tons. Last February, its total holdings amounted to 124.5 tons, equivalent to just 4% of Mexico’s international reserves.
This wrong decision is compounded by the fact that the gold sold was part of the very small amount of physical bullion that Mexico had in it’s possession; bars that had been stored in Banxico’s vaults.
In other words, Banxico purchased 120 tons of paper “gold”, and sold a very important part of the real metal it held! [Read more...]