Hungary Decides It’s Time To Bring the Nation’s Gold Home
The Central Bank of Hungary reported this week that it is repatriating its 3 tons (approximately 106,000 ounces) of gold from London. Hungary’s gold at current market prices is worth about $139 million. Hungary is one of more than a half a dozen countries that have opted to have their gold returned to them. Many European countries shipped their gold east to either London or New York for safe keeping during World War II (1939-45) and during the cold war with the U.S.S.R. from 1945-1989.
Hungary’s gold is being held at the Bank of England in London.
Germany Started The Recent Repatriation Craze in 2013
In January 2013, Germany requested that a portion of its gold held at the vaults of the New York Federal Reserve be returned to Germany. At that time, Germany also requested that most of its gold held at the Bank of London in England and all of the gold held at the Bank of France in Paris be returned to Germany.
German’s request set off a surge of repatriation requests from other central banks including from the Netherlands, Belgium and Austria. Nationalist movements in France and Switzerland (Save our Swiss Gold) demanded among other things that their nations’ gold be returned to their borders.
The President of the Deutsche Bundesbank, Jens Weidmann explains in the video below why Germany’s gold was overseas in the first place and the rationale for having it returned. The video also explains the importance of gold to Germany.
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Central Banks and Gold
Even though gold was removed from the global financial system in 1971, central banks continue to hold gold as a financial and monetary asset. In recent years, the Central Bank of Russia has been the world’s largest buyer of gold, followed by the central banks of China, Kazakhstan and Turkey. Central banks of the United States and other western central bank have not bought or sold gold for decades and continue to hold the most gold.
Moving gold across borders is not risk free as we learned this week when a plane carrying gold and silver from Russia rained down its contents over Siberia as the plane door blew open dispersing its precious contents to the ground below.