The World Gold Council earlier today Saudi Arabia has doubled its gold reserves.
The move makes a certain amount of sense in light of the euro zone crisis as SAMA (the Saudi Arabian Monetary Authority) tries to diversify a portion of its huge reserve horde out of dollars. The euro was the source of much of that diversification in recent years, but it appears the SAMA turned to gold when the euro began to wobble.
For what it’s worth, we heard talk last week of very aggressive buying of EUR/USD once again by SAMA, so perhaps we are getting back to business as usual, a support for EUR/USD, all else being equal. Higher oil prices give them more dollars to diversify, whether into euros, gold or whatever they choose.
