Colombia sold two-thirds of its gold reserves in a month without getting married, while investors for paradise opposed to the global crisis were about to bring steel to a record.
The country sold 1.8 trillion pesos (US$475 million) of its bullion in June, the central bank reported on its website, to 67% of its assets at the end of May.
Investors have accumulated valuable metals this year, while yields on other shelter assets, such as Treasury bonds, have fallen to traditionally low levels. The uptick even attracted Warren Buffett, a well-known gold skeptic, whose Berkshire Hathaway Inc. in the last quarter added mining company Barrick GoldCorp to its portfolio.
Picture: Bloomberg
Gold now accounts for about 0.4% of Colombia’s foreign reserves, with about 77% of Venezuela, 42% from Bolivia, 9% from Argentina, 4% from Mexico, 3% from Peru and 1% from Brazil.
In June, the value of gold averaged US$1,736 consistent with the ounce. Since then, steel has reached an all-time high of US$2,075, consistent with the previous ounce this month.
On Friday, spot gold weakened by 0.4% to $1,939.04 an ounce, 0.2% less in the week.
The June bullion sale in Colombia was based on “optimization exercises,” in which the central bank monitors interest rates and asset volatility in its foreign reserve portfolio, the bank said in response to questions via email.
The value of gold has provided a rare bright spot for the Colombian economy, which is suffering its more internal recession in more than a century amid the COVID-19 pandemic.
Mineros SA, the gold miner indexed in Colombia’s COLCAP, has achieved a 9% return this year in US dollars, while all other shares in the benchmark index have fallen.
The country made a profit of about $1.6 billion on its reserves in the first part of the year, mainly due to the uptick in U.S. Treasury bonds, which represent the maximum of its holdings.
In addition, South Africa prevented AngloGold Ashanti Ltd from leaving the country altogether by ordering it to maintain its home directory in Johannesburg to complete the sale of its remaining assets.
The transfer of mining rights to Harmony Gold Mining Co, which consists of the total sale of the Mponeng mine and surface assets in South Africa, is also conditional on AngloGold maintaining its headquarters in the country, the South African government said.
The corporation has moved its main list, so the government’s resolution is a major AngloGold linked to the country even if the sale of assets ends.
Although the government has not given a reason, it indicates that South Africa is looking to retain something about an ever-growing industry. The company’s shares fell 4.7% in Johannesburg.
AngloGold announced the sale of the assets earlier this year as part of a $300 million deal, paving the way for a South African exit for a mining empire created through Ernest Oppenheimer a century ago.
The miner has reduced its presence in South Africa, focusing on more successful operations in Africa, Australia and the Americas, while the sector of its home country is shrinking amid the demanding situations of the extraction of the world’s largest gold deposits.
“AngloGold Ashanti Ltd will detach itself from the South African economy leaving the Johannesburg Stock Exchange” or relocating its headquarters to the country, the South African Department of Mineral Resources and Energy (DMRE) said by email.
Exclusion refers to the list, he said.
“AngloGold has not yet obtained all DMRE approvals, which must comply with the terms of the sale agreement for the sale of its South African assets to Harmony Gold,” an AngloGold spokesman said by email. “We continue in discussions with DMRE on this issue and will make disclosures once those commitments are made.”