Why European central banks are relocating gold reserves out of North America

European central banks are rethinking where they store their gold. The Dutch central bank (DNB) moved 86 tonnes from North America to London, lifting London’s share of its reserves to 32.1% from 18.1% and putting it ahead of the 30.8% held domestically. The relocation leaves DNB “better prepared for severe crises,” with the gold “readily available for use in a crisis situation,” the bank said.

Wars and trade tensions are only part of it. Conflict does not “top the list” of motivations, World Gold Council Senior Market Strategist Joseph Cavatoni tells the BBC, with inflation, interest rates, and the ability to trade gold quickly also shaping reserve decisions. “I don’t get a sense that there’s an impending doom,” he said. Central banks are instead “being better educated around how to manage their reserve assets.”

The Netherlands isn’t alone. Banque de France sold 129 tonnes of gold held in New York and bought replacement gold that meets London Bullion Market Association standards in Europe, which it described as upgrading the quality of its reserves rather than changing their size.

Why London: The market offers deep liquidity and large quantities of bars meeting the London Good Delivery standard, according to the World Gold Council. The Bank of England’s vaults hold around 400k gold bars worth more than GBP 200 bn and give central banks access to that liquidity.

Looks a lot like home: Around 59 tonnes of the Dutch holdings in New York were sold and replaced with equivalent stocks in London, meaning the gold didn’t have to cross the Atlantic. About 27 tonnes were physically shipped from North America to the Netherlands, with a similar amount later moved from there to London. “With this relocation, we have improved the tradability of our gold reserves. We expect that we will never need to use them, but we do need to strengthen our resilience and preparedness,” said DNB Governor Olaf Sleijpen.

The volume is the pressure: Central banks bought an average of around 1k tonnes a year over the past four years, roughly twice the 500-tonne annual average of the preceding decade, according to the World Gold Council. Keeping it at home is expensive. “Domestic storage requires investment in physical security, audit infrastructure, and ins.; costs that can be disproportionate for smaller central banks,” Goldman Sachs research analysts tell the BBC.

REMEMBER- Gold passed USD 5k an ounce in January, setting a run of records before pulling back, and remains historically elevated. Goldman Sachs expects USD 4.9k per troy ounce by the end of this year.

Precedent, in the other direction: Germany moved 300 tonnes from New York to Frankfurt between 2013 and 2016, as part of a plan to hold half of its gold reserves domestically. Austria repatriated 90 tonnes in 2018 and now holds roughly half of its 280-tonne reserves domestically, with the rest distributed across the UK, France, and Switzerland to reduce concentration risk and maintain access to major gold markets.

MARKETS THIS MORNING-

Asian markets were mixed in early trading. Japan’s Nikkei was up around 0.2% and South Korea’s Kospi was down 0.2%. Meanwhile, US equities were broadly in the green, with the S&P 500 taking the lead.

THE CLOSING BELL: TADAWUL-

The TASI fell 0.2% yesterday on turnover of SAR 3.6 bn. The index is down 0.1% YTD.

In the green: Saudi Fisheries (+10%), East Pipes Integrated Company for Industry (+7.7%), and Ladun Investment (+6.7%).

In the red: Raydan Food (-4.4%), The Saudi National Bank (-2.8%), and Banque Saudi Fransi (-2.8%).

THE CLOSING BELL: NOMU-

The NomuC rose 0.7% yesterday on turnover of SAR 14.3 mn. The index is down 8.1% YTD.

In the green: MSGA Investment (+21%), Wajd Life Trading (+10%), and Anmat Technology for Trading (+8.8%).

In the red: Naf Company for Feed for Industry (-14.7%), Alhasoob (-9.4%), and Clean Life (-9.3%).

CORPORATE ACTIONS-

Mouwasat Medical Services’ board approved SAR 200 mn in dividends for 1H 2026, at SAR 1 apiece, according to a Tadawul filing. The dividend will be paid on 29 October.

MEANWHILE- Alandalus Property’s board decided not to distribute dividends for 1H, saying it needs to “strengthen the company’s financial position” and support new projects, according to another Tadawul filing.