Hungary Plans to Bring Home All of Its Gold
Over the last several years, a number of countries have taken steps to bring their gold home.
You can now add Hungary to that list.
Last summer, Germany completed a project to bring half of its gold reserves back inside its borders. The country moved some $31 billion worth of the yellow metal back to Germany from vaults in England, France and the US.
Germany isn’t alone in bringing home its gold. In 2015, Australia announced a plan to bring half of its reserves home. The Netherlands and Belgium have also launched repatriation programs. Even the state of Texas has put a plan in place to bring its gold within state borders.
According to a report in Hungary today, the Hungarian National Bank (MNB) has decided to repatriate all of its gold reserves. The 3-ton hoard valued at around 33 billion forint ($130 million) is currently stored in London.
The decision seems to be in line with international trends as storage of gold reserves out of the country is now considered risky by more and more central banks.”
The MNB also said it thinks having gold at home will “further strengthen market confidence toward Hungary.”
Hungary’s gold reserves have an interesting history. The country has held gold since its founding in 1924. In 1945, the US Army captured a train hauling Hungarian gold out of the country. The pro-Nazi Hungarian government had hoped to ship its reserves to Austria for safe-keeping. The US repatriated the Hungarian gold in 1946.
Hungary held between 65 and 70 tons of the yellow metal in the 1970s, but sold off a significant amount of gold in the late 1980s after the collapse of the gold-based Bretton Woods System.
Hungary’s gold holdings remain tiny, even in comparison to other Central European counties. Romania and Poland both have 103 tons, and Serbia has 13 tons. But despite its small holding, the Hungarian central bank thinks it will be better to keep its gold closer to home.
Gold repatriation underscores the importance of holding physical gold where you can easily access it. Gold-backed exchange-traded funds (ETFs) and “paper gold” have their place. But true security and stability come from physical possession of precious metals. That’s exactly why Hungary and other countries are bringing their gold home, safe within their own vaults.
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