Information relating to the decision to sell part of the UK gold reserves between 1999 and 2002.
This disclosure is correspondence, both internal and with the Bank of England, advice and statistics relating to the decision to restructure the UK’s reserve holdings by increasing the proportion held in currencies. A total of approximately 395 tonnes of gold was sold at 17 auctions between July 1999 and March 2002, run by the Bank of England on the Treasury’s behalf.
The proceeds of the sales (around $3.5bn or £1.9bn) were reinvested in dollar, euro and yen interest-bearing assets which remained part of the reserves. Gold is less liquid and the price of gold is more volatile than US, euro-area and Japanese interest-bearing assets. As a result of the sales a one-off and permanent reduction in risk on the net reserves was successfully delivered.