1 EXCLUSIVE

1.Central banks, international entities (e.g. International Monetary Fund) and governments are the single largest holder of gold in the world 2.These institutions controlled end of per cent (26,780 tons) of the worldwide available gold CENTRAL BANKS AND GOLD 2

1.All, ever produced gold is estimated to be 165,000 tons (5.321 billon ounces) 2.This corresponds to a market value of 7,950 billion US dollar, based on a gold value of 1427 per ounce 3.The gold fund SPDR Gold Shares held 1,300 tons 2010, making it the 6 th largest gold holder after France and before China CENTRAL BANKS AND GOLD 3

4

1.In 1999, 19 institutions signed the Washington Agreement on Gold (WAG). This ten year agreement restricts the sale of gold by its members to 500 tons annually 2.Signatories are the central banks having the Euro, the European Central Bank, the central banks of England, Switzerland and Sweden CENTRAL BANKS AND GOLD 5

1.Central banks in the West have been net sellers of gold, whereas those in the East have bought more gold than they sold 2.In the last years, several central banks, notably from Russia, India and China, have announced plans to increase their gold reserves CENTRAL BANKS AND GOLD 6

1.As a consequence, in 2009 central banks have become for the first time in 20 years net buyers of gold 2.In that year, net buying resulted in 470 tons of gold. The invigorated interest in gold can be traced back to the financial crisis, as this precious metal can be used as a hedge CENTRAL BANKS AND GOLD 7

1.As a consequence, in 2009 central banks have become for the first time in 20 years net buyers of gold 2.In that year, net buying resulted in 470 tons of gold. The invigorated interest in gold can be traced back to the financial crisis, as this precious metal can be used as a hedge CENTRAL BANKS AND GOLD 8

1.Gold played a major role for the economic policy of a state, as many countries either issued gold coins as means of payment, or pegged their national currency to gold 2.This leads to a fixed exchange rates and fosters international trade CENTRAL BANKS AND GOLD 9

1.The monetary system, in which the standard economic unit of account is a fixed weight of gold is called gold standard 2.Most Western countries followed this system from the end of the 19 th century until the 2 nd World War CENTRAL BANKS AND GOLD 10

1.Under the gold standard, central banks had the duty to keep the gold reserves at a certain levels to guarantee the gold pegging of their currencies 2.The successor of the classical gold standard was the Bretton Woods System (1946 – 1971) CENTRAL BANKS AND GOLD 11

1.Under the Bretton Woods System many countries fixed their exchange rate to the US dollar. And the US Central Bank fixed the dollar to gold (with around US$ 35 per ounce) 2.The end of Bretton Woods introduced floating exchange rates which diminished the role of gold as part of the monetary policy CENTRAL BANKS AND GOLD 12

1.Therefore, gold as part of the reserves of central banks shrunk from 60 per cent in 1980 to 8.6 per cent in March In September 2010, gold constituted 10.1 per cent of central banks’ reserves CENTRAL BANKS AND GOLD 13

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