Kazakhstan turns its back to store gold and turns to sell “Vent”

The Central Bank of Kazakhstan is looking to reduce the share of gold to approximately 50% of its total reserves of $34.5 billion, in a major paradigm shift from one of the world’s leading buyers of precious metal to a large seller this year.

The National Bank of Kazakhstan came among central banks whose bullion purchases fell for the second consecutive quarter, along with its counterparts in Turkey and Uzbekistan.

Kazakhstan’s overseas sales of about 67 tons in the first six months are part of a plan to reduce the share of the metal in reserves to the “best” level by 50 to 55% — equivalent to about 300 tons — at the end of 2023, compared to 314 at present. The central bank said in an email response that the rate was close to 56% at the end of June.

The central bank said that gold sales in foreign markets last year were about 120 tons, bringing it about $7 billion, “in order to diversify and ensure a balance in the distribution” of reserves.

Moving away from bullion hoarding also allows the bank to “offset foreign currency bleeding from reserves, which is invested in highly liquid instruments in foreign markets.”

With these steps, policymakers in Central Asia’s largest energy producer are ending a period in which the share of precious metal in reserves reached about 70% last year compared to about 10% in 2011, when the Government gave the Central Bank a “priority” to secure domestic supplies of refined gold.