Does the quantity of gold reserves, refined and unmined, of a Country Member, have any impact on the Country Member’s reserves of Gold Units?

It is important for GGMF to clarify and confirm its position regarding a prospective Country Member’s proven gold reserves, either securely stored, mined or unmined.

‘It is GGMF’s position that unmined gold reserves do not have any impact on the “financial” reserves of a Country Member until they are extracted, refined and the “use of” such gold is either transferred to GGMF or an approved third party.‘ Further details can be found here.

The reason is this approach is quite simple as:

1.  Gold units issued by GGMF for the Country Member represent units in a trust that holds gold in constructive custody. These units undergo an annual audit to ensure that the total number in circulation does not exceed the gold holdings allocated to each country. Since unmined gold cannot be audited, it does not influence the quantity of gold units issued. To be eligible, gold must first be mined, refined, and securely stored within the country. Only then can it be deeded to the trust, allowing for an increase in the gold units allocated to that country.
2. Refined gold held in storage in another location will also not influence the financial reserves of the Member Country. The refined gold may be subject to other claims against it, such as pledges, liens or other derivative contracts. These claims against the gold has to be addressed first before it can be deeded to the Country Member Trust. Additionally, since gold can easily be moved it has to be in approved third party storage.

The transfer of the ”use of” gold from the Country Member to GGMF or an approved Third Party, and the issue of a Gold Certificate or Gold Units in exchange, will definitely increase the Country Member’s Reserves as set out in the Article entitled “How will gold be priced and use transferred to GGMF or any other party once the Gold Units are Legal Tender?”

It is GGMF’s stated policy that any Gold should preferably remain where it is situated. Refer Article VII, Section 7.02 (a)(ii) of the Articles of Agreement.

Therefore, should a Country Member wish to bring their physical Gold onto its Gold Unit reserves, this is a simple matter of transferring the “use of” the Gold to GGMF. GGMF, will obviously carry out a fully assay and due diligence before issuing a Gold Certificate or Gold Units in return for a SKR from an accredited security warehouse and Custodian.’