The biggest loser is the Swiss National Bank, which sold 1,550 tonnes over the decade and at today's gold prices is $19 billion poorer, followed by the Bank of England, which is $5 billion poorer.
The Treasury yesterday defended its decision to sell gold as a way to diversify reserves and cut risk. "As a result of the programme, a one-off reduction in risk of approximately 30 per cent was achieved," it said. The Swiss National Bank declined to comment other than to say that it did not plan to sell more gold.
However, central bankers are confident that over the long run their move out of gold and into bonds will pay off and reduce the volatility of their portfolios, people familiar with their thinking said. Analysts also argue that because some banks had more than 90 per cent of their assets in gold, some disposals were warranted.
The proportion of European reserves held as gold remains extremely large even after years of sales, at an average of about 60 per cent, compared with the world average of 10.5 per cent.
After 10 years of steady sales, Europe's gold sales are set to slow to their lowest levels since 1999, while central banks outside Europe have already become net buyers of gold. The US, the world's biggest holder of gold, decided not to follow Europe's move. Germany and Italy are the only two big European central banks that did not follow the UK, mostly because of domestic disputes about what to do with the proceeds.
