The Netherlands has moved 86 tonnes of gold previously held in the United States and Canada to London, citing rising geopolitical unrest and the need to make the reserves readily available during a crisis.

De Nederlandsche Bank, the Dutch central bank, said the relocation would strengthen the country's resilience and preparedness. The gold was moved between March and August, with the holdings now stored in the vaults of the Bank of England.

The Netherlands held about 313 tonnes of gold in the US and Canada. Around 59 tonnes were sold in New York and replaced with purchases in London, while more than 27 tonnes were physically transferred from North America to the Netherlands and then sent on to London.

“We expect that we will never need to use them, but we do need to strengthen our resilience and preparedness,” said Olaf Sleijpen, governor of the Dutch central bank.

Why London?

London is one of the world's major gold-trading centres, making it easier to buy or sell the metal quickly if a crisis occurs. The Bank of England is also one of the world's largest gold custodians. Its vaults hold about 400,000 gold bars worth more than £200bn, according to the source material.

The World Gold Council says the Bank of England remains the most popular vaulting location, although central banks are increasingly diversifying where they store their reserves.

Goldman Sachs analysts Lina Thomas and Daan Struyven said the location of gold was “increasingly top of mind” for reserve managers. They noted that storing gold domestically requires spending on physical security, audit infrastructure and insurance, which can be costly for smaller central banks.

A broader shift

The Netherlands is not the only European country to have reviewed the location of its gold. France has announced that it moved gold reserves from the US to France. Germany's Bundesbank transferred more than 216 tonnes from overseas storage locations over several years ending in 2016, including 111 tonnes from New York and 105 tonnes from Paris.

The practice has historical precedents. Goldman Sachs analysts said some European central banks moved part of their gold holdings to New York during the Cold War.

Joseph Cavatoni, a senior market strategist at the World Gold Council, said wars and trade tensions were influencing some decisions, but were not the main factors. Inflation, interest rates and the ability to trade gold quickly were also important considerations.

“I don't get a sense that there's an impending doom,” Cavatoni said. He added that reserve managers were becoming better informed about how to manage and use their assets.

Companies involved in transporting gold have reported stronger demand from central banks. Brink's Global Services said heightened geopolitical and economic uncertainty, together with gold's growing role as a strategic reserve asset, appeared to be contributing to the trend.

Central banks have accumulated an annual average of about 1,000 tonnes of gold over the past four years, according to the World Gold Council. That compares with an average of about 500 tonnes a year during the preceding decade.

Gold prices have also risen sharply in recent years, reaching a series of record highs and passing $5,000 an ounce in January. Although prices had fallen from the high recorded earlier in the year, they remained historically elevated. The increased demand from central banks is one factor cited for the rise in prices.