More European Nations Seeking Repatriation Of Gold Reserves
Los Angeles CA, (Tangible Investments) - by James O’Dell - Precious metals prices turned lower on Monday, after ending mixed on Friday, when Gold eased $4.00 or 0.33 percent to finish the week at $1,194.30 an ounce, against a stronger dollar and equities, after the Fed said it will proceed with patience in the timing of its first interest rate hike since 2006. Silver rose $0.17 or 1.07 percent to end the week at $16.07 an ounce while the Gold/Silver ratio fell to 74.32.
The week began with a sharp recovery in Gold that was said to be linked to Russia's failure to halt the ruble’s slide against hard currencies, even after boosting interest rates from 10.5 percent to 17 percent. The rate increase only slowed the ruble's descent, temporarily. The Russian Ruble has lost more than 55 percent against the U.S. dollar in 2014, due largely to slumping crude oil prices and Western sanctions against Russia for its role in the annexation of the Crimean peninsula from Ukraine in May.
In India, when the draconian import restrictions that were imposed on Gold in August of 2013, were lifted at the end of November, Indians embarked upon an importation spree. In spite of the fact that the restrictions were still in place for much of November, Gold imports soared to over 151.58 tons, a massive 571 percent increase over the same period last year.
Russia's deepening financial crisis continues to weigh on markets, as European equities fell 0.5 percent on Wednesday. The ruble plunged 19 percent to 80.10 to the dollar for the first time ever on Tuesday as Russia now mulls whether to initiate capital controls following the failure of the biggest interest rate increase in 16 years to instill confidence in the currency.
It was the worst slide in the ruble since 1998, the year Russia defaulted on its debt. Russia's failure to halt the collapse of the ruble on Tuesday has left the nation facing the possibility of a full scale currency crisis.
Switzerland has imposed its first negative deposit rate in nearly forty years and is threatening to take further action to halt the inflows of cash from Russia’s financial crisis. Swiss National Bank (SNB) President Thomas Jordan says that Russia's financial turmoil was a “major contributory factor” in its decision to introduce the 0.25 percent charge on sight deposits, the commercial bank holdings at the SNB.
Meanwhile, all across Europe, nations are demanding the repatriation of their Gold reserves, which are often stored in other countries. Holland, Belgium and Austria are following Germany in seeking the return of their Gold, while the Swiss made Gold repatriation a part of its Swiss Gold Referendum in November.
Why the sudden rush to bring home the Gold? Many believe it's due to lack of trust after years of speculation as to whether or not “official Gold” was being leased into the market. The question arises when investors continue to see China, India and Russia buying up the total current global mine supply and are curious as to how the rest of the world is being supplied.
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