Why European countries are moving their gold out of North America

The Dutch central bank has confirmed it moved 86 tonnes of gold from North America to London. This was reported by Qazaqyia.kz citing BBC News.

According to the Dutch central bank, 86 tonnes out of a total of about 313 tonnes held in the US and Canada were relocated to London "in view of increasing geopolitical unrest". The bank said the move would make it "better prepared for severe crises".

The decision appears to be a response to the unstable state of the world, with trade and military wars prompting countries to take precautions and hold their gold closer to home.

Earlier this year, France announced it had removed its gold reserves from the US to home shores. Meanwhile, Germany's Bundesbank transferred more than 216 tonnes of the metal from storage locations abroad - 111 tonnes from New York and 105 tonnes from Paris - over a few years ending in 2016.

According to Goldman Sachs analysts Lina Thomas and Daan Struyven, this strategy has been used before in times of global instability. "Some European central banks moved part of their gold holdings to New York during the Cold War."

However, Joseph Cavatoni, senior market strategist at the World Gold Council, told the BBC that while wars and trade tensions were "playing into some of these decisions", it didn't "top the list" of motivating factors. Inflation, interest rates, and having gold in a place where it can be traded quickly also played a role.

Cavatoni said: "I don't get a sense that there's an impending doom, but what I do think is people are being better educated around how to manage their reserve assets."

De Nederlandsche Bank governor Olaf Sleijpen said: "We expect that we will never need to use them, but we do need to strengthen our resilience and preparedness."

London was seen as the best choice due to its position as a major trading centre. If you want to buy or sell gold fast in a crisis, London is the place to be, making the Bank of England a popular storage spot.

The Bank of England is one of the largest custodians of gold in the world. Underneath the 300-year-old institution in central London sits about 400,000 bars worth more than £200bn.

According to industry surveys by the World Gold Council, the Bank of England remains the most popular vaulting location, but central banks are increasingly diversifying where they store the precious metal.

The Dutch sold about 59 tonnes in New York and then bought more stocks in London, meaning that amount didn't need to be hauled across the Atlantic. But more than 27 tonnes were "physically transferred" from the US and Canada to the Dutch town of Zeist. A similar quantity was also sent from Zeist to London.

Companies that perform such services are tight-lipped on how operations are carried out, but it's fair to say the security measures and planning are extensive to avoid the risk of a real-life Italian Job.

Cavatoni said one standard approach to move gold stocks was to sell the commodity in one place and buy it in another. "Let's say I want my gold in New York and I have it in London. I could sell it in London, buy it in New York, same day, same time, effectively book transfer without actually having to put it on any other logistical change."

There are only a few select companies which handle gold shipments across borders, one of which is Brink's Global Services, who told the BBC it had seen "increased demand" from central banks in recent times.

Brink's executive vice president Nader Antar said: "Heightened geopolitical and economic uncertainty, along with gold's growing role as a strategic reserve asset, appear to be contributing to this trend."

According to Goldman Sachs analysts, storing gold at home comes at a cost. "Domestic storage requires investment in physical security, audit infrastructure, and insurance; costs that can be disproportionate for smaller central banks."

Over the past four years, central banks have accumulated an annual average of 1,000 tonnes of gold, up significantly from the 500 tonnes average over the preceding decade, according to the World Gold Council. The trend stretches back to the global financial crisis and is expected to continue.

Gold has been having a moment in recent years. Its price has surged to hit a series of record highs, passing $5,000 an ounce in January. Several factors are behind its value jumping, including gold's role as a safe haven asset. Inflation and interest rates also influence gold's popularity.