Central bank action may rejuvenate gold in Europe – CNBC

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In a sign of institutional interest, Munich Re, a leading reinsurance firm based in Germany, said it was diversifying into gold and currencies due to the negative rate environment, earlier this month.

“The side effects of the ECB policy are of course now having quite devastating consequences. I think they are solving the wrong problem with the wrong remedies,” Chief Executive Nikolaus von Bomhard said, according to a translation posted on the Munich Re website.

Banks bring gold home

Gold sales by European central banks have slowed in recent years, but there is little sign they will seek to imitate the large purchases made by some emerging market central banks, particularly in Asia.

Some European central banks with large portions of their physical gold reserves abroad are repatriating them, in part due to the changing security picture in the region. Notably, the German Bundesbank transferred 210 tons of gold to Frankfurt from Paris and New York last year and plans to transfer a further 307.4 tons by 2020.

However, the Swiss public voted in a referendum in 2014 against a measure that would have forced the central bank to hold a minimum of 20 percent of its reserves in gold, after the Swiss National Bank, the government and parliament came out against the move.

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Central bank action may rejuvenate gold in Europe – CNBC