Saudi Arabia’s central bank holds more than twice the amount of gold previously estimated, a shift that analysts said reflected more of an accounting adjustment than an indication the oil rich nation was veering away from its conservative reserve policy.
A June report by the World Gold Council, an industry group that tracks gold bullion holdings by nations the world over, showed the Saudi Arabian Monetary Agency’s gold reserve figure climbed to 322.9 tonnes compared to 143 tonnes reported in March.
The council said its gold data was “modified from the first quarter 2008 as a result of the adjustment of the SAMA’s gold accounts.”
Analysts said the change either signalled an accounting revision or that the kingdom, which sits atop the world’s largest proven reserves of conventional crude oil, had stepped up buying gold in 2008 as the metal’s value took a frequent beating during the global economic meltdown.
The same financial downturn also pummelled the price of oil, Saudi Arabia’s chief export.
Gold prices have gained steadily this year, settling Friday at a record $1,258.30 an ounce. At that level, SAMA’s total official holdings of the precious metal are worth about $14.33 billion, or roughly 3.5 per cent of the country’s total $413 billion in foreign assets.
“The only reason (for the change) beside the accounting of a larger portion of gold as SAMA assets, was they could have bought more gold in 2008,” said John Sfakianakis, chief eco-nomist at the Riyadh-based Banque Saudi Fransi-Credit Agricole Group. “I think it was purely a buying opportunity in 2008,” he said. “There isn’t a shift away from their conservative approach of managing their foreign assets, being liquid, low risk and very long-term based.” But those increases, recorded in SAMA’s April Monthly Statistical Bulletin, fail to even remotely explain the more than doubling of its gold reserves, as reported by the World Gold Council.