Italy's Gold reserves become the focus of politics – Commerzbank

FXStreet Insights Team FXStreet

Italy is considering declaring its central bank’s 2,452 tons of Gold as the property of the people, a move opposed by the ECB over fears it could threaten bank independence. While the Italian central bank is unlikely to be forced to sell, central banks in Brazil and Poland have shown strong appetite for Gold, with October purchases reaching 53 tons, Commerzbank's commodity analyst Carsten Fritsch notes.

ECB urges Meloni government to rethink proposal

"Italy is apparently considering declaring the Gold reserves held by the central bank to be the property of the people. The ECB has called on Prime Minister Meloni's government to reconsider this proposal. Apparently, there are fears that the central bank could be forced by the government, as the elected representative of the people, to sell Gold."

"This, in turn, could undermine the independence of the central bank, which is guaranteed in the ECB's statutes. The Italian central bank holds 2,452 tons of Gold in its vaults, making it the third-largest Gold reserve holder behind the US Federal Reserve and the Deutsche Bundesbank. It is very unlikely that the Italian central bank will actually be forced by the government to sell Gold."

"If it did, it would have no trouble finding grateful buyers among other central banks. As reported by the World Gold Council, central bank Gold purchases rose to 53 tons in October, reaching their highest monthly level this year. The largest buyers in October were the central banks of Brazil with 16 tons and Poland with 15.6 tons."

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

EUR/USD remains stronger near 1.1750 as US Dollar weakens, Germany's ZEW index surges

EUR/USD extends its gains for the third consecutive session, trading around 1.1730 during the Asian hours on Wednesday. The pair appreciates as the US Dollar continues to lose ground amid rising United States–Greenland concerns.

GBP/USD eases from tops, back to 1.3460

GBP/USD is extending its winning streak into a second session, now surrendering some gains and receding toward the 1.3460 area on Tuesday. Cable’s rebound remains propped up by the persistent selling pressure on the Greenback, while the British Pound appears, for now, largely unfazed by the mixed signals from the UK labour market.

Gold rises above $4,750 amid US-Europe tensions

Gold price climbs to near $4,775 during the early Asian trading hours on Wednesday. The precious metal extends the rally and is poised for another record high amid a time of political and economic uncertainty. The speech by US President Donald Trump at the World Economic Forum in Davos, Switzerland, will be in the spotlight later on Wednesday.