Gold is a proven safe haven asset – Sammy Gyamfi

The Chief Executive Officer for Ghana Gold Board (GoldBod), Lawyer Sammy Gyamfi, says gold has proven to be a safe haven asset.

“For those who have been unjustly attacking the Bank of Ghana for their decision to sell portions of the country’s gold holdings, as a deliberate reserve portfolio diversification measure, how do you feel about the free fall of gold prices we are currently witnessing, where the price of bullion in the last few weeks has dropped from a record-high of about $5,500/oz to about $4680/oz?

“You see, gold is a proven safe haven asset. However, it is subject to significant price volatilities that pose considerable risk to reserve preservation,” lawyer Gyamfi stated.

Below is his full statement 
LAWYER SAMMY WRITES:

For those who have been unjustly attacking the Bank of Ghana for their decision to sell portions of the country’s gold holdings, as a deliberate reserve portfolio diversification measure, how do you feel about the free fall of gold prices we are currently witnessing, where the price of bullion in the last few weeks has dropped from a record-high of about $5,500/oz to about $4680/oz?

You see, gold is a proven safe haven asset. However, it is subject to significant price volatilities that pose considerable risk to reserve preservation.

This is why a middle income country like Ghana with Gross International Reserves of barely 5.7 months, ought not to over-concentrate its reserves in gold holdings but rather, diversify same across different asset classes.

In reserve portfolio management, safety and liquidity considerations are paramount. Converting portions of our gold holdings into cash and investing same to generate returns for the country, was therefore a SAFE and sensible decision by the BoG.

Simply put, the BoG converted about 22 tons of the country’s gold holdings into U.S dollars, added it to our reserves and invested it to generate returns for the country. Our reserves remained intact. No national asset was lost. And this decision has significantly minimized the impact of the recent collapse in gold prices on Ghana’s reserve position.

Kudos Dr. Asiamah and your wonderful team at the BoG. Keep up the good work for mother Ghana.