One week ago, the world was not exactly shocked to learn that after Germany and the Netherlands, one more country had unofficially joined the ranks of nations who have seen this all before and know how it ends, when reports emerged that Austria would repatriate 140 tons of gold from the Bank of England (appropriately immortalized in "this is what happens when you hand your gold over to The Bank of England for "safekeeping".) As of today, it is official.

Earlier today the Austrian Central Bank confirmed the Kronen-Zeitung report, and said that by the year 2020, it would hold 50%, or 140 tons, of its gold domestically, up from 17% currently. This means that Austria will withdraw some 140 tons of gold from the BOE which holds 80% of Austria's gold currently (and will soon hold only 30%) and send 92.4 tons back home to Vienna with another 47.6 tons being sent to Switzerland.

Which is also the biggest news: Austria is explicitly demonstrating a lack of confidence in the "pro-western" system of which the Bank of England is a critical cog, and instead opting for "neutral" Switzerland, which will hold nearly 50 tons of the gold formerly located at the Bank of England.

Why?

As AFP notes, the central bank said it took the decision after recommendations made by the Austrian Court of Audit in February, which warned of a "heightened concentration risk" linked to storing the majority of its reserves in Britain. At the time, the bank had argued the policy was warranted because London was a major international centre for the gold trade."

Well, London still is a major international center, but in the past three months the bank surprisingly changed its mind after reviewing the court's advice to diversify storage locations.

Vienna confirmed it would begin to gradually repatriate 92.4 tonnes this summer. A further 47.6 tonnes will be transferred from Britain to Switzerland.

From the Austrian Central Bank:

In May 2015, the gold reserves held by the OeNB amounted to 280 tons, having remained unchanged since 2007. Austria’s gold reserves are fully owned by the OeNB, which maintains and manages them with utmost care. In line with the OeNB’s current gold storage policy, 17 % of its gold holdings are at present kept in Austria, 80 % in the United Kingdom and 3 % in Switzerland.

Recently, the Governing Board of the OeNB adopted the 2020 gold storage policy following a regular in-house gold strategy and storage policy review, while also considering the recommendations made by the Austrian Court of Audit. The cornerstones of this policy are as follows:

• By the year 2020, 50% of Austria’s gold reserves are to be held in Austria (OeNB and Münze Österreich AG), 30% in London and 20% in Switzerland.
• Starting from mid-2015, the new storage policy will be gradually implemented in keeping with security and logistical requirements.
• A comprehensive review and, if need be, adaptation of the storage policy is scheduled for 2019.
• The OeNB will regularly report on the progress in its upcoming annual reports.

* * *

Good luck Austria with that repatriation and be sure to triple check that gold. After all you don't want to be like the Bundesbank which in 1968 got the short end of the stick following some questionable collusion between the BOE and the Fed as we reported in "Bank Of England To The Fed: "No Indication Should, Of Course, Be Given To The Bundesbank...""