The Central Bank of Ireland increased its gold holdings by two tonnes this year, with acquisitions made in September and October. The covert acquisition increases Ireland's stocks from 6 to 8 tonnes, a significant 33 percent rise that lends credence to the notion that central banks are worried about sustained global inflation.
Gold has been utilized as a hedge against inflation all over history. As a tangible asset, it appreciates in value in lockstep with other assets, while money depreciates, making it a popular method of keeping the original currency's worth in an alternative form.
Gold Buying Data of Central Bank of Ireland
Ireland claimed to own 193,69 troy of ounces of gold before the gold purchases in September and October 2021. According to IMF and other sources, Ireland possessed 0.19 million ounces of gold as of the end of August 2021.
Ireland's gold reserves climbed to 0.23 million ounces at the end of September 2021. By October 2021's end, the IFS data indicates that Ireland's gold reserves will have increased to 0.26 million ounces.
All of this gold is fully allocated, meaning that none is classified as monetary gold held in exchange for cash collateral.
Comparative Rise in Irish Gold Reserves
Comparing the newest number of 258,000 ounces to the amount of 193,693 ounces at the end of August results in a net gain of 64,307 ounces or precisely 2 metric tonnes. As a result, Ireland's gold reserves grew from 6.02 tonnes to 8.02 tonnes.
It's uncertain where precisely these 2 tonnes of gold were acquired or where they are presently housed, although it was likely purchased and stored at the Bank of England vaults, where Ireland holds significant reserves already. The only gold held in Ireland is housed in the Central Bank of Ireland Mint in Sandyford, County Dublin.
Bear in mind, however, that this International Reserve table and its accounting may be misleading, as part or all of this Irish gold may still be on loan at the Bank of England. Until Ireland's Central Bank comes clean and publishes details of its gold holdings and historical and current gold lending positions, as well as a full weight list of all 640 of its London Good Delivery gold bars held, complete with refiner serial numbers and fine troy ounce weight, the true nature of the purchase remains unclear.
Conclusion
While Ireland's Central Bank has provided no explanation for the rise in its gold reserves, its governor Gabriel Makhlouf reminded policymakers that they could not afford to be cavalier about inflation. Given the collapse of the 'inflation is temporary' narrative and the massive 33 percent increase in Ireland's gold holdings in September and October, it seems that Ireland now believes that the inflation coming that is beginning to unravel will be problematic.
