Canada is among the largest gold producers on the planet, but as of last month the government valued its official holdings from the precious metal at zero.
The country sold 21,851 ounces of coins in February, the Finance Department said Thursday in a disclosure of its official international reserves. A footnote within the report said the government continues to have 77 ounces from the rare metal.
Asset valuations are rounded towards the nearest $1 million within the official international reserves, therefore the worth of the rest of the gold was set at zero, department spokesman David Barnabe said by e-mail.
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Data from the World Gold Council suggest Canada shines from the industrialized peers as the only G7 country without a stockpile with a minimum of hundreds of tonnes of gold.
Canada’s gold reserves peaked in 1965, if this held around $1,150,000,000 in bullion and coins. In 1980, the government began selling its gold “in a gradual and controlled pace” to boost returns, with the proceeds invested in interest-bearing forex assets, according to the finance department website.
A department spokesman says the government includes a long-standing policy of diversifying its portfolio by selling physical commodities like gold in order to invest instead in assets that are more easily traded.
Former senior Finance Department bureaucrat Don Drummond says he doesn’t think it can make any sense for Canada to hold any gold since it hasn’t delivered a great rate of return over time and it costs money to keep it.
Drummond states that hundreds of years ago gold symbolized the wealth of a rustic.
Canada continues to be gradually selling from its gold stash for decades and, recently, the government has grown its holdings of U.S. and British currencies.
The last bullion was sold by December 2003. The rest of the high quality coins were sold off by January 2014, Barnabe said.
All that remained were “lower-quality King George V $5 and $10 gold coins dated 1912, 1913 or 1914, which contained imperfections from handling or environmental conditions,” Barnabe said. They were melted off into gold bullion and are for sale off “at market prices.”
In February, the U.S. held about 8,133 tonnes of gold, which made up 72 percent of its reserves, based on the World Gold Council.
The council also said Germany had 3,381 tonnes for 66 percent of their reserves last month, while Italy and France each held more than 2,400 tonnes – over 60 percent of the respective reserves.
With files from Canadian Press
Bloomberg.com
