Saudi Gold Reserves over Twice Prior Estimate

Source:

". . .gold reserves climbed to 322.9 tons from 143 tons reported in March."

Saudi Arabia's central bank (CB) holds more than twice the amount of gold previously estimated, a shift 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 WGC, 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 tons compared to 143 tons 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 signaled 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 pummeled 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% of the country's total $413 billion in foreign assets.

"The only reason (for the change) besides the accounting of a larger portion of gold as SAMA assets, was they could have bought more gold in 2008," said John Sfakianakis of 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 assetsóbeing liquid, low risk and very long-term based."

Sfakianakis said the purchase of gold by SAMA should also not be "seen as a signal for sovereign debt doubts globally by the CB."

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