5331.0 - Balance of Payments and International Investment Position, Australia: Concepts, Sources and Methods, 2011  
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 08/03/2011   
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NONMONETARY GOLD

CONCEPT

The Balance of Payments and International Investment Position Manual Sixth edition states that:


    10.50 Nonmonetary gold covers all gold other than monetary gold. Monetary gold is owned by monetary authorities and held as a reserve asset. Nonmonetary gold can be in the form of bullion (that is, gold bullion takes the form of coins, ingots, or bars with a purity of at least 995 parts per thousand, including such gold held in allocated gold accounts), gold powder, and gold in other unwrought or semimanufactured forms. Jewelry, watches, etc. that contain gold are included under general merchandise, not nonmonetary gold. Nonmonetary gold sales and purchases that are not shipped are valued at transaction prices, not Free On Board. The price should include any dealer’s margins or commissions not billed separately.

    10.51 Allocated gold accounts are treated as being arrangements for the storage of gold bullion. A change in ownership of an allocated gold account holdings is, therefore, treated in the same way as gold bullion. For the same reason, allocated gold accounts are not treated as deposits. If an entity puts gold it already owns into an allocated account, or withdraws gold from an allocated account without selling it, no change of ownership occurs so no transaction is recorded. In contrast, unallocated gold accounts are financial assets (included under monetary gold or deposits, depending on the holder). As a result, a deposit of bullion to an unallocated gold account is shown as an exchange of nonmonetary gold for a financial asset; and a withdrawal is the reverse unless both parties are monetary authorities or international organisations.

    10.52 When both parties to a gold transaction are either monetary authorities that hold the gold as reserve assets or international financial organisations, gold sales are recorded as monetary gold in the financial account. Otherwise, gold sales are recorded under nonmonetary gold.

    10.53 Nonmonetary gold is shown separately from other goods because of the special role of gold in financial markets, because gold sales and purchases largely relate to existing stocks, and because the values of sales and purchases may be particularly large in some cases, such as gold dealing centers. In many cases, there is no physical delivery to the new owner, because the gold is held at specialised bullion storage centers. However, change in ownership is the criterion for the recording of nonmonetary gold, so gold sales and purchases should be recorded even when there is no physical movement.

    10.54 Nonmonetary gold may be held as either a store of value or for other (industrial) purposes, such as manufacturing of jewelry or for use in dental work. When feasible, nonmonetary gold can be subdivided into gold held as a store of value and other (industrial) gold as supplementary data.
Reference:

Balance of Payments and International Investment Position Manual Sixth edition, Chapter 10 Goods and Services Account.


LINKED TO
    Goods Account


SOURCE

METHOD

Credit and debit estimates of Non-monetary gold are compiled by adding:
  • International Merchandise Trade Statistics on non-monetary gold crossing the customs' frontier, adjusted to exclude the value of gold identified as imported for processing or exported after processing (without a change in ownership). The service fee associated with the processing of goods is included in international trade in services.
  • Specific gold exports and imports associated with Reserve Bank gold loans.
The ABS does not currently have an on-going source of information on the change of ownership of allocated gold accounts not owned by monetary authorities. However, transactions in allocated gold accounts are not considered to be a significant component of non-monetary gold in Australia. An investigation into allocated gold accounts is included on the Balance of Payments review program.




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