Gold comes home as nations hedge against Americana

The timing and implications of a decision are often more eloquent than any speech. This week, the Netherlands and Norway—two Nato allies located about 900 km apart along the North Sea—made moves that say more about how nations, even allies, now view America and the unravelling of geopolitics. The Netherlands moved 86 tonnes of gold out of New York and Ottawa to London. De Nederlandsche Bank (DNB) did not shy from its reasoning. It said, 'In view of increasing geopolitical unrest, DNB is strengthening its crisis preparedness.' DNB President Olaf Sleijpen observed, 'With this relocation, we have improved the tradability of our gold reserves.' A portion was sold in New York and repurchased in London. Both the method and the destination matter. North of the Netherlands, Norway's sovereign wealth fund will be offloading around $80 billion in US Treasury bonds. The Norges Bank Investment Management cut its exposure to government bonds from 70 percent to 50 percent after assessing geopolitical and concentration risks. The NBIM stressed 'broad diversification as a strategy in a changing world'. One country is moving its metal away from the US; the other is distancing from American paper. Neither is a protest. Both air the same anxiety and ask the same question using different assets. It's about the risks of financial security imposed by unravelling geopolitics. And they are not alone. France sold 129 tonnes of gold held at the New York Fed and replaced it with gold in Europe, leaving no French central-bank gold in New York. Germany, with the world's second largest reserves, moved 300 tonnes in recent years to hold 50 percent of its gold at home. The Reserve Bank of India doubled its gold reserves stored at home to 77 percent of its 880 tonnes.