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In Gold we trust: Dutch National Bank states that gold provides security in times of financial crisis

Published by Karl Martin Karus in category Market Insights on 08.11.2019
Gold price (XAU-SEK)
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The Dutch National Bank (De Nederlandsche Bank) informed on its website. (Source: https://www.dnb.nl/en/payments/goud/index.jsp) recently that the only way to survive the collapse of the economic system is to own gold.

The DNB recognizes that gold is the perfect ‘piggy bank’ which serves as the anchor of trust for the financial system. ’’If the (financial) system collapses, the gold stock can serve as a basis to build it up again’’, DNB stated in its announcement.

The Dutch National Bank currently holds more than 600 tons of gold, spread across Amsterdam, New York, and a part of it in the vaults of the Canadian and UK central banks in Ottawa and London. The DNB states that in times of financial crisis, its physical gold stock functions as an ultimate reserve asset and an anchor of trust. Additionally, the gold stock serves to cover the ultimate systemic risks. To ensure a wide geographical distribution, the gold reserves are held at different locations.

The stock markets currently are at high levels (some are even at record high levels). There are some signs of an upcoming recession already with some warning signs issued by Germany’s Central Bank: Bundesbank. The DNB adds that ‘’Shares, bonds and other securities are not without risk, and prices can go down. But a bar of gold retains its value, even in times of crisis. That is why central banks, including DNB, have traditionally held considerable amounts of gold.’’

As per the World Gold Council (WGC), Central bank net purchases increased 74% higher year on year (in 2018). This is the highest level of annual net purchases since the suspension of dollar convertibility into gold in 1971, and the second highest annual total on record.

Heightened geopolitical and economic uncertainty throughout the year increasingly drove central banks to diversify their reserves and re-focus their attention on the principal objective of investing in safe and liquid assets. (Source: Gold.org)

Preserve your wealth and prepare yourself. Follow the steps of the central banks and buy physical gold: the ultimate asset without a counter party risk! Remember, historically, gold has retained its status as a store of value.

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Alternatively, you can send us an email on tavex@tavex.se or book a consultation with our gold expert by calling us on the phone on +4686782030 or visiting our head office at Smålandsgatan 9, Stockholm, Sweden.

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