The standards of purity have changed over time, and most of the US gold dates from before the 1930s; and so a lot of US-domiciled gold have different purities that don't follow the current international standard. The purity requirement has been going up over time. A lot of US gold is 90% gold and 10% copper, but gold traded on the international market needs to be at least 99.5% pure. Here [1] is a good breakdown.

[1] https://www.bficapital.com/blog/what-is-inside-fort-knox

Most of this is googleable but there are thousands of traders that make sure the gold price is the same globally so nobody had to “move” their gold in the reverse for this trade to work.

The difference between London and the US is that the bars are of different size (12.5 vs 1kg).

You're reading way to much into this.

Physical gold bars are transferred via plane between London and New York every day. The gold flies in the cargo holds of regularly scheduled commercial passenger flights. The quantity transferred depends on demand, and could be several metric tons daily.

This is nothing unusual. Dubai is another major gold transfer hub, and it operates via the same mechanism.

Regarding the article highlighting differing international standards for gold, London uses standard 400-ounce bars, while the US uses 100-ounce or 1kg bars. Often, the bars need to be remelted (elsewhere, typically in Switzerland) before they can be added to the vaults.

Again, nothing unusual.

Their goal isn't only safe storage, it's also being able to sell when needed.

You can't quickly trade with the gold that's in their own safe storage facility in Zeist, because you would need to physically transport it. The reserve at the Bank of England is put there because there is a large market for gold trading there. So you can use the gold immediately to influence the markets.

Putting it in a safe place in another European country wouldn't have added value over storage in Zeist.

London has an old school gold exchange. Pretty much you can buy and sell by moving a part between vaults (at least that's how I understood it to work in the past). Now I expect it to be just a spreadsheet but who knows.

I’m surprised why they don’t just move it back to their own country and put it in a safe in Netherland.

England is a country in Europe.

England is definitely a European country. I'm tired of people constantly making this political abuse of language of conflating "the EU" with "Europe".

(And yes, saying "America" for "US of A" annoys me too. First step towards losing an imperialist state of mind is letting people from Canada and Brazil be in America).

Of course the bank is not going to make a political statement, they have more important business to do. The article makes it pretty clear right at the top that the bank’s statement doesn’t mention Trump:

> Experts say that rhetoric appears inherently related to the abrasiveness of the Trump administration towards traditional allies.

Also, the “experts” are just right here. Are you gonna say that Trump hasn’t been throwing our allies under the bus?

It's mostly historical and a combination of security from the WW2 and Cold War eras as well as how the gold standard worked before Bretton Woods.

Most countries held gold reserves as their currencies were backed by it. When money needed to move because of trade, the ratios of currencies backed by gold would shift as money got converted to other currencies. However, constantly moving physical gold back and forth with the ebs and flows of trade was impractical, so ownership of gold in central bank vaults usually just had its legal ownership marked on ledgers. Physical gold moving was more part of reconciliation. This description is an oversimplification as in practice, countries didn't always play by the rules of the gold standard (revaluations, going on and off the standard, etc), but you get the general idea.

This mostly ended as Bretton woods came into effect and the new system was basing the US dollars on gold, then other countries held direct US dollars and traded that instead. Countries could then convert those US dollars into gold. This ended when Nixon closed the gold window when he refused to raise interest rates as there started to be a run on gold as countries rushed to convert. The backdrop was that high spending on the Vietnam was and new social programs was driving inflation, but Nixon knew that would cause an economic slowdown he wasn't willing to do. Jimmy Carter then took a lot of the political flack for allowing the central bank to raise rates to kill it. This is why central bank independence is so important.

During times of geopolitical risk, countries would physically move their gold to be held in trust in friendly and/or rule of law countries. The USA was seen as this between ~1914-now.

Besides the reasons listed by the others, this also a matter of relationships as there a deep ties between these nations and the Netherlands. Without the Dutch financing the Americans, America would not have been able to become independent from the English. The Dutch were also the first country on earth to acknowledge America's independence [1][2], costing them a war with the pissed England [3].

There are a lot of Dutch people living in Canada.[4]

  _____

2. <https://en.wikipedia.org/wiki/The_First_Salute>

3. <https://en.wikipedia.org/wiki/Fourth_Anglo-Dutch_War>

4. <https://en.wikipedia.org/wiki/Dutch_Canadians>

Makes trade easier than shifting currency. It’s also more stable and liquid if you need to make things happen in an emergency.

> I'm curious the reason why it was ever held in the US and Canada

Random Educated Guess; Probably part of some show of mutual trust to cement a treaty or other agreement, made way back when allied governments could mostly trust one another to hold to such agreements somewhat reliably?

Makes it harder to steal.

Don't forget that the European continent has had wars almost non-stop for centuries. It is a good strategy to place your gold in a location that has not seen much action in the past 250 years.

I would assume WWII and the Cold War?

(another guess) to convert to dollars, the gold would need to be delivered to the custody of the US Fed, which is easiest when the bars are physically in the Fed's vault. in a low-trust situation, you have all the gold in your own country, but then its so much leas liquid bc you need to physically deliver it to trading partners, or they must trust your accounting of their share in your vault.

Could be due to the fact that before 1970s the currency was backed by Gold and they had it in US to easily convert it to USD if needed

It was originally payments owed to Dutch interests in America being converted to gold and stored locally on their behalf, as opposed to having to be transported across the Atlantic back to the Netherlands.

Then later the Dutch moved a lot more of their gold over there before/during WWII in order to keep it out of reach of the Nazis.

People still buy BTC (let alone central banks)?