00:00France's central bank has pulled its remaining gold deposit out of the US with a capital gain of $15 billion.
00:07Over the past year and a half, 129 tonnes of gold has been moved from New York back to France,
00:14while other gold stocks were sold off at record prices.
00:17The value of gold has more than quadrupled over the last decade.
00:21I'm joined now by international economist Vicky Price. Great to have you on the programme again.
00:25And Vicky, why does gold still matter so much to central banks in 2026?
00:32I think one of the reasons for wanting to have more gold is to diversify away from the US dollar.
00:37One reason for that, but also to have basically a more mixed type of reserves that they can go to
00:43if they need to
00:44and not be tied to one particular currency, because, of course, there are so many crises affecting different currencies in
00:50different ways.
00:50And more recently, the concern, really, that perhaps the US was exiting up to a point from the world trade
00:58payment system
00:59and other currencies perhaps would become more dominant.
01:03But I think it's a double-edged sword in some sort of ways, if we can use that expression,
01:09because quite a lot of the increase in the price of gold that we have seen recently is precisely because
01:14the central banks
01:15have decided to have more of that gold.
01:17And, of course, what they are also trying to do is benefiting from the arising prices by selling the old
01:23gold they hold
01:24and then transferring that into the new type of gold with a lot more special markings and also environmentally sourced,
01:30which is what is now required under the new Basel III requirements, banking requirements for central banks.
01:37So there's a bit of that going on.
01:40It sounds quite a lot like creative accounting, Vicky.
01:43I mean, look, because France, well, they haven't changed how much gold they hold.
01:47They've just moved it, haven't they, from New York to Paris.
01:50So, I mean, what do you think it says about confidence in geopolitics?
01:55Well, there is a bit of an issue.
01:56And, of course, you know, everyone now is looking at everyone else, like Germany,
01:59which also has a reasonable amount of gold in the US.
02:02Would they do the same? Possibly.
02:04But I think they're taking advantage of the price, that they're buying the new type of gold probably, you know,
02:09more cheaply.
02:10And they're able to transfer that money into, you know, better use.
02:14And suddenly there's the central bank, the Bank of France, seems to be in a much better financial position than
02:20was the case just a few days ago.
02:21So there are all these little tricks.
02:23But there is no doubt that everyone is rethinking how, you know, your position yourself for the future
02:28and whether, you know, the world order has changed.
02:31And it has.
02:32There is no doubt about that.
02:34But it probably is more a question of just taking advantage of high price and selling that gold rather than
02:40anything else.
02:41And we have had various periods of that like that before.
02:44The UK sold loads of gold under golden browns some time ago.
02:47And we've been regretting it ever since.
02:49Certainly we have been.
02:50From China to Poland, central banks are reshaping their gold strategies.
02:55Could this change how nations manage risk, how they protect their economic sovereignty?
03:02Yes, up to a point.
03:03Of course, you have to be certain that gold is going to continue to have a sort of high value
03:09because, of course, it could collapse for whatever reason because there isn't anything attached to it.
03:14There's no real sort of forced convertibility rate or anything like that as there used to be.
03:19So you've got a real problem.
03:21It is an asset you have, which is not necessarily going to be constantly going up in price.
03:26So you're not guaranteed they're going to have that leverage, if you like, for the future.
03:31But there is no doubt that, you know, if you look at a number of countries, I mean, you mentioned
03:35a few already, and indeed, you know, some of these European countries are now hoarding more gold than was the
03:41case before.
03:42They've been buying gold.
03:42One of the reasons why, as I said earlier, the price has been going up.
03:45But, I mean, it includes sort of India, Turkey.
03:48In a number of cases, why they're doing it is also because there are concerns about their own currencies and
03:53they may need to use that gold to intervene in the foreign exchange markets.
03:57I mean, Turkish exchange rate has been, of course, itself not very stable, but, you know, loads of others as
04:03well.
04:04So it is a bit of a guarantee, if you like, to the need to have something that you can
04:11use to intervene for your currency and keep it strong rather than another currency like the US dollar, for example.
04:18Vicky Price, great to have your insight.
04:20Thank you very much.
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