Romania’s Gold Reserves Lost $1.5B In Value In 2013

01.08.2014 By Roxana Pricop

The reduction by almost 30% of the international gold prices in 2013, a first for the past 12 years, cut deep into the value of major central banks’ reserves, which piled up during the crisis on fears of a financial meltdown.

The value of the gold reserves held by the Romanian central bank shrank by $1.5 billion last year, while the sharpest fall, of $110 billion, was reported by the US Federal Reserve.

Gold prices declined by 27% in value last year to $1,204/ounce on the London market, the deepest slump of the past three decades.

Romania’s central bank holds the bulkiest gold reserves in the Central and Eastern Europe, ranking 35th in the world, with 103.7 metric tons. In 2013, the bank’s reserves depreciated by $1.5 billion, and were estimated at $4 billion at the end of December.

However, these losses are just “on paper”, as the depreciations will be booked only if central banks decide to sell gold. On a longer term, though, of around 5 years, most central banks are still in the black.

In 2008, Romania’s total gold reserves--at the same level of 103.7 tons as the bank has not purchased gold since 2000--were worth $2.9 billion. In the early 2000s, the gold reserve had a value of $1.4 billion.

Thus, over the past decade, the bank has gained $2.6 billion from rising gold prices alone. Since 2003, the reserves have remained flat at 103.7 tons, while the gold prices have tripled.

For 2014, analysts of the world’s biggest investment banks expect gold prices to keep falling, following the rebound of the global economy.

(English version by Catalina Apostoiu)