19 December 2014
ZH fail on Soc Gen fail on Russia selling its gold
Zero Hedge fails when commenting on gold are common, but I was surprised to see in this ZH piece to see that Soc Gen got sucked into due to poor research.
As is common in internet land, people pick up stuff by others without doing basic drilling down to the source. The reason you have to do this is because people often misinterpret the source. Other times the source is wrong.
ZH quote the following from Soc Gen: "It appears possible that the Central Bank of Russia has started to sell off some of its gold reserves in December, with some sources reporting that official gold reserves dropped by $4.3 billion in the first week of the month."
Now that is a very specific figure, $4.3b. It seems that Soc Gen got it from this Business Insider republication of a Vesti Finance article which said "On Thursday, the Central Bank of Russia announced that gold reserves dropped by $US4.3 billion in just one week, reports Vesti Finance."
However, if we check the source link provided we get the following:
"Russia's international reserves for the week from November 28 to December 5, decreased from $ 420.5 billion to $ 416.2 billion, the central bank said on Thursday. ... For the previous week, from 21 to 28 November, gold reserves increased from $ 420.4 billion to $ 420.5 billion. On November 14th the size of gold reserves stood at $ 420.6 billion, on November 7 - $421,400,000,000 rubles."
Now the decrease they are talking about is $4.3b in total reserves but the headline mistakenly assumes it is all gold. The gold specific figures they mention show completely different numbers. While Business Insider hasn't corrected its article, Frank Knopers noted the following update Yahoo Finance made to its republication of the Vesti Finance article:
"Editor's Note: Earlier it was reported that the Central Bank's gold reserves decreased by $4.3 billion, quoting Vesti Finance. However, in actuality, it is international reserves assets that have decreased — not gold. Appropriate changes have been made."
Now how hard was that fact checking Soc Gen and ZH?