As of the end of February, Canada’s multi-year selloff of its gold reserves in favor of more liquid financial assets was nearly complete. The official report for February detailed a monthly sale of 21,851 ounces of gold.
The same report stated that Canada does still maintain 77 ounces of gold, the last of its gold reserves slated for sale. This final scrap of gold is valued at roughly $130,000, but is deemed negligible by both the Canadian government and global financial experts, leaving Canada effectively without gold reserves. This process of selling gold has been a long and gradual one, spanning out over several years. The reasoning behind this move is that Forex, or foreign exchange, assets are more liquid than a physical holder of value such as gold and so can be more effectively managed.
“The government has a long-standing policy of diversifying its portfolio by selling physical commodities (such as gold) and instead investing in financial assets that are easily tradable and that have deep markets of buyers and sellers,” said Canadian Finance Department Spokesman David Barnabe. It is not yet clear how a complete lack of gold reserves will affect the Canadian economy in the long run. However, even as Canada is selling its gold, several other nations around the world are buying. Russia and China, in particular, have recently bought up large amounts of additional gold in order to bolster their reserves. According to January gold buying data, Russia added more than 600,000 ounces to its reserves in the first month of 2016, with China buying over 500,000. Both countries have experienced increased currency volatility over the course of the past year.
Canada sells off remaining gold reserves; has just 77 ounces left
From a billion dollars to zero: Canada stands alone in G7 as it empties its coffers of gold
Share with your friendsFollow Us