The Repatriation Of Gold Is A Hot Trend

 

 

Judging by the gold price you probably wouldn’t see it, but gold is starting to take up a more important position than ever on the balance sheets of central banks worldwide. An increasing amount of countries are repatriating their gold from the vaults of the US central bank, and not without reason.

Of all the gold that is found in the vaults of the Federal Reserve, there is no bar of gold that belongs to the central bank itself. The Fed is ‘merely’ a secure storage space for gold of countries around the world, including its own, but also of foreign governments, central banks and a few international organizations.

Much of the gold that is stored in the vaults of the US Federal Reserve dates from before or right after WWII. Many European countries shipped their gold to the US in fear of a Russian invasion. At a certain point, the Federal Reserve had 12,000 tons of gold in its vaults. Today, more than half of that gold has been returned.

The repatriation of gold in practice

Recently different countries decided to repatriate their gold; Germany started in early 2013, for example. This happens in phases, of course, and the repatriation of gold has not been completed yet. The Netherlands, which is the 9th largest owner of gold with about 650 tons, also found it necessary to repatriate 122.50 tons of gold. Austria and Belgium wanted their gold back shortly after as well. In Switzerland there was even a referendum to force the SNB to buy 1,500 tons of gold within 5 years to diversify the central bank’s reserves. Ultimately that did not happen, but it does show the role that gold is starting to play. Leader of the opposition in France, Marine Le Pen, also put in a request for repatriation of French gold.

The chart below shows how strong the repatriation trend really is.

The long-term trend chart clearly shows the Fed holding less and less gold over time.

Since 1970 more than 50 percent of the gold that was stored in the vaults of the Fed is gone. The repatriation of gold is HOT and that is certainly not without reason. Insiders and analysts who have done their research know what is going on and are making their moves in gold.