In this space I let you know a few years ago – thanks to the Transparency Law – that the 120 tons of gold that Banco de México (Banxico) had bought between 2011 and 2012 were under protection in the vaults of the Bank of England.
I also informed him at that time that Banxico did not even have a segregated account, that is, with assigned gold, but only an account with “rights” over gold, but not hard-and-hard physical gold. After making public our recommendation that the Mexican central bank request the allocation of that gold metal, it finally did so, and thanks to that it already has more than 7,000 specific bars of its own.
After all these years, however, Banxico has not bought a single gram of gold again, unlike what other central banks in the world continue to do due to the well-founded mistrust they have in the current monetary system, based on the dollar. US.
Such has been their appetite for gold that those monetary authorities accumulated it at an unprecedented rate during the first two months of 2023, when in total they bought 125 net tons, a figure not seen since 2010according to a report by the World Gold Council (WGC).
Some of the countries that led these acquisitions were Singapore, Turkey, China, Russia and India.
In this context, we recently requested updated information, via the National Transparency Platform, and it turns out that Banxico has not only not bought gold, but presents a reduction in the already tiny total physical gold holdings in national territory.
The figures are as follows: in October 2016, Banco de México had 3,881 million troy ounces of gold, of which 98.95 percent were protected in the United Kingdom0.0004 percent in the Federal Reserve Bank in the United States and the remaining 1.05 percent in its vault in Mexico.
In that year, Banxico had 7,265 assigned bars of 400 ounces on average each in England, which means that –I repeat, in assigned accounts– it had approximately 2,906 million ounces. The rest, more than 934,000 ounces, remain unallocated; that is to say, no ownership of specific serial numbered bars, as it should be. And history repeats itself in 2023.
With information as of April 2023, it turns out that the total gold reserves owned by Banco de México are 3.86 million ounces, that is, during this period they have been reduced by 21,000 troy ounces. 99.37 percent is protected in the United Kingdom, 0.63 percent in national territory and a minimal fraction of 0.0004 percent in the Federal Reserve Bank of New York.
This indicates that the participation of physical gold in the reserves that the Central Institute has in Mexico has decreased significantly, from 1.05 percent (41,000 ounces) in 2017 to only 0.63 percent (24,000 ounces) in 2023.
As you will remember, right here I informed you that since 2016, the year in which Banxico began publishing its precious metal coin circulation statistics, there is a clear downward trend in all the gold coins it issues.
whatCould it be that our central bank is stopping putting these gold coins into circulation –centennials, mainly– because here, in national territory, they have run out (or almost) of the physical gold metal? It is not a far-fetched hypothesis if we consider that their issuance has been given droppers in recent months, causing a shortage that raises their prices.
As the institution responsible for safeguarding the purchasing power of the peso, it is essential that our monetary authority provide transparency and clear explanations about the current situation of its reserves of the physical metal, and the measures it is taking to face this apparent shortage of gold in its vaults. .
It is not a matter of real scarcity, since Mexico is one of the main producers of gold and silver in the world, so Governor Victoria Rodríguez Ceja would do well if she makes better use of our subsoil wealth putting more centenarians and Libertad ounces into circulation for the savings of citizens.
Editor’s Note: This text belongs to our Opinion section and reflects only the author’s vision, not necessarily the High Level point of view.
William Beard Master in Economics from the Austrian School; liberal, gold market specialist and editor of investment newsletter Top Money Report