Gold surges with reports of Gaddafi’s $6.4bn Golden Security Blanket

Gold surges with reports of Gaddafi's $6.4billion gold reserves

Gold surges with reports of Gaddafi's $6.4billion gold reserves

Estimated as being among the world’s top 25 gold reserves, Muammer Gaddafi’s assets – 143.8 tonnes of gold – at the Libyan Central Bank are reportedly worth $6.4billion.

No more guesses as to why 68-year old Gaddafi remains unfazed while the international community continues tries to cut off his funding by their onslaught of sanctions and asset freezes.

Moving Gold Reserves

Many central banks choose to hold their gold reserves in international vaults in London, New York or Switzerland.

However, sources familiar with Libya’s gold market have reported that precious yellow metal reserves belonging to Libya have been kept within the country, hence the accumulation of what has become a billion-dollar Golden Security Blanket for Gaddafi.

Libya’s gold reserves were stored at the central bank in Tripoli before unrest broke out in Libya. However, reports say that since the spread of tension, these reserves may have been moved to another location, such as the southern city of Sebha – within reach of Libya’s borders with Chad and Niger.

And it is the same factor that makes gold so appealing for investors, criminals and dictators alike: that the value of this precious yellow metal is absolutely independent of a specific government.

In full recognition of this fact, Egypt, following massive unrest, banned gold exports so as to prevent former government officials from moving their wealth abroad.

A similar pattern has been observed with Iran, with the country rapidly increasing its gold reserves in recent years, in an apparent attempt to shift away from the US dollar and thus protect its reserves from risk of seizure.

Liquidation Possibilities and Gold Price Rise

A $6.4billion reserve of gold is enough to continue supporting a small army of mercenaries for a long time, and could be Gaddafi’s lifeline if he can sell them. And while bankers told the Times that international banks or trading houses were unlikely to buy any gold believed to be from Libya, Gaddafi might still find buyers in Chad or Niger.

“If a country like Libya wants to make their gold liquid it would probably be in the form of a swap – whether for arms, food or cash,” Walter de Wet, the head of commodities research at Standard Bank, told the Times.

With the United States featuring as the holder of the largest gold reserve at 8965.6 tonnes, other countries with large holdings include Germany with 3749.8 tonnes, China with 1161.9 tonnes, India with 614.8 tonnes and Venezuela with 401.1 tonnes.

“The gold market is reacting to the fact that Gaddafi hasn’t folded,” said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago. “He’s backed into a corner, and if he remains in power under a cease-fire, a significant amount of uncertainty will come out of that region.”

The price of gold has risen recently, fuelled by growing instability in the Middle East and North Africa, and while gold prices continue to rise because of continuing uncertainty, Gaddafi’s gold reserves afford him the security of continuing attacks on civilians.

Vrushti Mawani
Vrushti Mawani, News Editor Industry Leaders Magazine (www.industryleadersmagazine.com)

Recent Posts

America is Losing its Appetite for Plant-Based Meat

America is Losing its Appetite for Plant-Based Meat

Most meat in 2040 will not come from animals, says report. However, the recent decline in sales of plant-based meat fell by 1.8 percent compared to the year before, taking declines
57 mins ago
Fusion startup raises $1.8 billion to give us unlimited clean energy

Fusion startup raises $1.8 billion to give us unlimited clean energy

Commonwealth Fusion Systems secures more than $1.8 billion in Series B funding to commercialize fusion energy. The funding round was led by Tiger Global Management with participati
21 hours ago
Omicron might push inflation, says OECD

Omicron might push inflation, says OECD

The latest Coronavirus variant, Omicron, which is believed to be more transmissible and severe, might derail growth and recovery and raise costs, according to the Organization for
1 day ago
Who is Parag Agrawal, Twitter’s new CEO?

Who is Parag Agrawal, Twitter’s new CEO?

Indian-born Parag Agrawal took over as the CEO of Twitter as co-founder Jack Dorsey stepped down for the second time in his career. Agrawal is the fourth person to take the reins a
2 days ago
Goldman Sachs rolls out paid leave for pregnancy loss

Goldman Sachs rolls out paid leave for pregnancy loss

Goldman employees are now eligible for 20 days of paid leave for a miscarriage or stillbirth. The investment banking giant is also increasing its retirement fund matching contribut
2 days ago
Boom in Tech IPOs in 2021

Boom in Tech IPOs in 2021

The big tech cloud-based software companies such as Zoom, Snowflake, Asana, Airbnb, Amazon, Salesforce and Palantir have all witnessed a rise in stock prices as work from home and
3 days ago