Belgium Denies Repatriating Gold From the UK

Belgian newspaper Het Nieuwsblad was reporting on Wednesday Belgium will repatriate 200 tonnes of gold from the Bank Of England (BOE). De Tijd is now stating the opposite, quoting the governor of the Belgian Central Bank (NBB) Luc Coene:

The repatriation from the UK is not true…. There are other and more effective ways to verify if the gold in London is really ours. We have an audit committee that inspects the Belgian gold in the UK regularly…. Repatriating would be more expansive with transport, storage and security costs.

One thing is for sure, the Belgians are nervous about their gold (227 tonnes) held abroad. In December 2014 the Luc Coene admitted he was investigating to repatriate all Belgian gold reserves, on TV-network VTM Nieuws:

Luc Coene: If one feels that in surrounding countries these decisions are taken, one knows that this question will be asked to us as well. We’re pro-active investigating all the elements, so when the question will be asked, we can answer it.

The practical problem is the transport of the gold, with all the risk that come with it. Second, if we repatriate we need to setup a large security system in Belgium. Though currently this is done by certain central banks that are specialized in this.

Did the investigation point out the transport and storage costs would be too high? Currently the storage fee NBB pays to its custodians (BOE, BIS, Bank of Canada) is €250,000 a year. Is Belgium not repatriating because of the costs or because it got obstructed by other authorities?

Last week I reported about the mystery regarding the fine gold tonnage claimed to have been repatriated by the Netherlands and Germany in 2014 from New York (208 tonnes), and the drop in total foreign gold deposits disclosed by the Federal Reserve Bank Of New York (FRBNY) in 2014 (177 tonnes). The mystery – that adds to a long list of oddities – couldn’t be clarified to me by the central bank of the Netherlands, Germany or US. Additionally, I called and emailed to the central bank of the Ukraine to ask whether they had deposited any gold in New York in 2014 that could help explain the mysterious 31 tonnes gap. Until now, all four central banks were reluctant to say anything that could restore their common credibility, but perhaps one will in the future – still waiting on email reply from the central bank of the Ukraine.

There is enough evidence European countries, among others, are nervous about the security of their official gold reserves stored abroad – who wouldn’t be if unprecedented amounts of physical gold were moving to Asia while Western consultancy firms are clearly underreporting this trend. Accidentally there are more and more stories popping up that might be a backwash from the tension between the big custodians (FRBNY, BOE) and the gold owners.

This story about Belgium repatriating 200 tonnes from the UK, which was officially denied after a few hours by the NBB, makes the story of the Netherlands that bought 10 tonnes last December, which was also officially denied after a few hours, more suspicious. I hate to speculate, though our central banks and the impossibility of the numbers they put out force me to speculate – apparently there is no other option.  

The fact the 31 tonnes gap is not being elucidated by the central banks in concert might signal these central banks have something to hide. If the custodians have something to hide, we can ask ourselves; did Belgium apply for withdrawing 200 tonnes of gold from the UK, but shortly after got a telephone call this request was not part of the range of possibilities? Or will the Belgians repatriate, but for security reasons don’t like the global press to know?

UPDATE 5 PM GMT+1: Press release from the NBB:

In accordance with the Organic Law and the Statute of the National Bank the official foreign reserves of the Belgian State, including the gold reserves, are held and managed by the NBB.

The official gold reserves account for 227 tonnes, most of which is stored at the Bank of England, and the remainder at the Bank of Canada and the Bank for International Settlements.

The National Bank does not intend to repatriate these reserves, which are regularly audited.

The National Bank will report any movement regarding these gold reserves as appropriate.