Best of the Week
Most Popular
1. Crude Oil Price Trend Forecast - Saudi's Want $100 for ARAMCO Stock IPO - Nadeem_Walayat
2.Gold Price Focusing on May Cycle Bottom - Jim_Curry
3.Silver, silver, and silver! There’s More Than Silver, People! - P_Radomski_CFA
4.Is the Malaysian Economy a Potemkin Village - Sam_Chee_Kong
5.Stock Market Study Shows Why You Shouldn’t “Sell in May and Go Away” - Troy_Bombardia
6.A Big Stock Market Shock is About to Start - Martin C
7.A Long Term Gold Very Unpopular View - Rambus_Chartology
8.Stock Market “Sell in May and go away” Study When Stocks Are Down YTD - Troy_Bombardia
9.Global Currency RESET Challenge: Ultimate Twist - Jim_Willie_CB
10.The Coming Silver Supply Crunch Is Worse Than You Know - Jeff Clark
Last 7 days
US Stock Market Elliott Wave Predictions for 2018 and Beyond - 20th May 18
Are You Still Fearful of Cryptos? - 20th May 18
US Stocks - Why I am Short-term Bearish, Medium-term Bullish - 20th May 18
Looking for a Turn in Gold Price - 20th May 18
GDX Gold Mining Stock Fundamentals 2018 - 19th May 18
Semiconductor Stock Market Canaries: Chirp, Warble… Soon a Croak and Silence? - 19th May 18
Three Drivers of Gold Price - 18th May 18
Gold Market in First Tertile of 2018 - 18th May 18
What Happens Next When Small Cap (Russell) Leads the Stock Market - 17th May 18
Negative Signs for EUR/USD? AUD/USD - Battle - 17th May 18
DOW Jones and CRUDE Oil on a Cliff Edge, Waiting for a Nudge! - 17th May 18
Gold Price No More Subtleness – It’s Show Time! - 17th May 18
VIX Cycles Point to Stock Market Correction - 17th May 18
Trump Sounds End Times Armageddon Trumpet for Jerusalem, Israel Evangelical Prophecies - 16th May 18
Our Next Stock Market Dow Fibonacci Price Targets – Get Ready! - 16th May 18
The Coming Copper Crunch - 16th May 18
Stock Futures Are on a Sell Signal - 16th May 18
What to do When the IRS Comes for Your Property - 16th May 18
IS BITCOIN ANONYMOUS? - 16th May 18
Bitcoin Tide Might Have Turned - 15th May 18
UK Online Gambling Market Grows According to UKGC - 15th May 18
Stock Market Study: What Happens Next when Dow Goes Up 8 Days in a Row - 15th May 18
Fibonacci Price Ladder Points to Higher Stock Prices - 15th May 18
U.S. Dollar Rally Is Doomed - 14th May 18
Gloomy Scenarios for the Fed That Should Boost Precious Metals - 14th May 18
US Dollar One Reversal Too Many - 14th May 18
SPX futures are higher, but so is VIX - 14th May 18
Precious Metals and Miners NUGT – The Sleeping Giant Trade - 14th May 18
Is This The Netflix Of Cannabis? - 14th May 18
US Quest for Iran Regime Change: Will EU Sustain the Nuclear Deal - 14th May 18
Stocks Bears Last Stand - 14th May 18
Stocks Bear Markets Don’t Start when Real Interest Rates are this Low - 13th May 18
Stocks and Bonds Still Only 1 of 3 Macro Amigos to Destination - 13th May 18
Silver Forecast 2018 and Beyond, Investing for the $35+ Price Spike! - 13th May 18
Study: Breadth is Leading the Stock Market Higher. A Bullish Sign - 12th May 18
Ways on How to Get An LLC - 12th May 18
Kanye Is Right: Slavery Is A Choice And We're All Slaves Today - 12th May 18
Trump’s Iran-Decision Did-not and Won’t Affect Oil Prices - 12th May 18

Market Oracle FREE Newsletter

Trading Lessons

Hungary’s Gold Repatriation Adds To Growing Protest Against US Dollar Hegemony

Commodities / Gold and Silver 2018 Mar 13, 2018 - 04:34 PM GMT

By: GoldCore

Commodities

– Hungarian National Bank (MNB) to repatriate 100,000 ounces gold from Bank of England
– Follows trend of Netherlands, Germany, Austria and Belgium each looking to bring gold back to home soil
– Hungary one of the smallest gold owners amongst central banks, with just 5 tonnes
– Central bank gold purchases continue to be major drivers of gold market
– Russian central bank gold reserves now exceed those of China
– Decisions to repatriate and increase gold reserves come as rifts between East and West widen


A country’s sovereignty is becoming the driving force of so many changes in the geopolitical sphere, today. Whether it is Brexit, surprise electoral victories in central Europe or a change in trade deals, sovereignty is at the forefront of so many of these decisions.

One of the first indicators that there was a change in the water when it comes to globalisation and international cooperation was through central bank gold buying and repatriation.

For some time now many central banks have been working on building up their gold reserves and ensuring they are stored on soil it believes to be safe and trustworthy.

The most recent central bank to make this change is that of Hungary. Last week it was announced that it intends to bring 100,000 ounces of its very limited 5 tonnes gold reserves, back home from the Bank of England.

This is not an unusual move. In recent years we have seen the likes of Germany, Venezuela and the Netherlands each repatriate their gold from various locations. The pace does appear to have been picking up since the late Hugo Chavez decided to bring home 180 tonnes of gold in 2011.

Furthermore, huge central banks namely Russia and China have been adding to their gold hoards, one more publicly than the other. Both have also been encouraging the use of gold as a means of payment in international trade as a means of avoiding US dollar hegemony.

The decision to place more focus on gold reserves is a statement by central banks and their governments to reduce the counterparty risk on their reserve assets. When holding another country’s currency you are vulnerable, the same applies to when a third-party holds your gold at a time when their own assets are perhaps more exposed than you’re comfortable with.

Russia, China and Turkey leading the gold rush

Hungary’s decision on gold repatriation was not something that made the mainstream news. After all, 100,000 ounces is very little when you consider than Russia increased its physical gold exposure by 20 tons in January 2018 alone.

Hungary decision is, however, a major comment on the current mindset of countries that feel they need to start working to protect their finances and borders. Hungary’s political changes are widely known and have been criticised extensively by both the EU and wider Western world.

The decision to bring gold home is a statement that says Prime Minister Viktor Orban would rather have the country’s assets close to home rather than in the hands-off a country that perhaps does not have his own best interests at heart.

This is a common theme, not just reflected in gold repatriation decisions but also in gold purchases.

Russia, China and Turkey have each materially increased their gold reserves in recent years. Since March 2015 Russia has bought gold every single month. January’s purchase took their reserves above those of China, a level which had previously been monitored as an example of the East’s great interest in moving away from US dollar dominance.

China has been famously coy about its gold reserves. apart from the period from July 2015 to October 2016, China only reported its gold reserve increases at various multi-year intervals. Most recently it has been reporting zero additions to the IMF.

Russia’s reasons for buying so much gold is akin to those of China, Turkey and smaller countries such as Kazakhstan. Gold gives each of these countries independence from the US dollar amid financial sanctions, trade wars and ongoing posturing by the West.

The West is also full of gold bugs

Whilst many in the West are dismissive about gold, the behaviour of central banks suggests quite a different mindset. The top four holders of gold are all from the West. Germany, the second largest has been making big strides of late to show their interest and faith in gold.

Not only did they make the decision to repatriate a late proportion of their gold back to home soil but they also recognised that transparency when it came to the country’s gold reserves was paramount.

‘…another milestone and a global first, an additional fourth step towards increasing transparency was taken with the publication of a list of all German gold bars, totalling around 270,000 in number. The Bundesbank has now published this roughly 2,400-page list three times since October 2015, even though it involved a series of significant challenges. There is no ‘blueprint’ for inventory lists of gold holdings and, in 2015, virtually no central bank in the world had ever released such a list.’

Act like a central bank

Gold cannot be devalued as the euro, dollar, sterling and all fiat currencies currently are. It cannot be confiscated as can deposits through bank bail-ins and it is extremely difficult to confiscate gold coins and bars if owned in allocated and segregated storage in safe vaults in the safest jurisdictions in the world.

Gold is a borderless money that acts as the ultimate reserve and safe haven in a diversified portfolio. This is something central banks are strongly aware of. The difference between the East and West banks is that the East is making big strides to bring gold to the forefront of their international affairs.

By adding gold to their reserves they are gaining equal footing with Western banks who have so far tried to dominate under a US-centric financial system.

Much of the above may sound as though it does not apply to the everyday saver and investor, but that couldn’t be further from the truth. The decision to move assets into physical gold is a decision to take control of your portfolio and to reduce the counterparty risk to which it is exposed. This is no different whether you are a bank with billions or a person with a few thousand.

Gold Prices (LBMA AM)

13 Mar: USD 1,318.70, GBP 948.94 & EUR 1,069.60 per ounce
12 Mar: USD 1,317.25, GBP 950.66 & EUR 1,069.87 per ounce
09 Mar: USD 1,319.35, GBP 955.21 & EUR 1,072.50 per ounce
08 Mar: USD 1,325.40, GBP 955.08 & EUR 1,070.39 per ounce
07 Mar: USD 1,332.50, GBP 960.07 & EUR 1,071.86 per ounce
06 Mar: USD 1,324.95, GBP 957.01 & EUR 1,074.00 per ounce
05 Mar: USD 1,326.30, GBP 958.78 & EUR 1,075.63 per ounce

Silver Prices (LBMA)

13 Mar: USD 16.51, GBP 11.88 & EUR 13.38 per ounce
12 Mar: USD 16.46, GBP 11.88 & EUR 13.39 per ounce
09 Mar: USD 16.49, GBP 11.92 & EUR 13.40 per ounce
08 Mar: USD 16.48, GBP 11.89 & EUR 13.31 per ounce
07 Mar: USD 16.65, GBP 12.01 & EUR 13.42 per ounce
06 Mar: USD 16.62, GBP 11.96 & EUR 13.41 per ounce
05 Mar: USD 16.51, GBP 11.95 & EUR 13.42 per ounce

Mark O'Byrne

Executive Director

This update can be found on the GoldCore blog here.

IRL
63
FITZWILLIAM SQUARE
DUBLIN 2

E info@goldcore.com

UK
NO. 1 CORNHILL
LONDON 2
EC3V 3ND

IRL +353 (0)1 632 5010
UK +44 (0)203 086 9200
US +1 (302)635 1160

W http://www.goldcore.com/uk/

WINNERS MoneyMate and Investor Magazine Financial Analysts 2006

Disclaimer: The information in this document has been obtained from sources, which we believe to be reliable. We cannot guarantee its accuracy or completeness. It does not constitute a solicitation for the purchase or sale of any investment. Any person acting on the information containd in this document does so at their own risk. Recommendations in this document may not be suitable for all investors. Individual circumstances should be considered before a decision to invest is taken. Investors should note the following: Past experience is not necessarily a guide to future performance. The value of investments may fall or rise against investors' interests. Income levels from investments may fluctuate. Changes in exchange rates may have an adverse effect on the value of, or income from, investments denominated in foreign currencies. GoldCore Limited, trading as GoldCore is a Multi-Agency Intermediary regulated by the Irish Financial Regulator.

GoldCore is committed to complying with the requirements of the Data Protection Act. This means that in the provision of our services, appropriate personal information is processed and kept securely. It also means that we will never sell your details to a third party. The information you provide will remain confidential and may be used for the provision of related services. Such information may be disclosed in confidence to agents or service providers, regulatory bodies and group companies. You have the right to ask for a copy of certain information held by us in our records in return for payment of a small fee. You also have the right to require us to correct any inaccuracies in your information. The details you are being asked to supply may be used to provide you with information about other products and services either from GoldCore or other group companies or to provide services which any member of the group has arranged for you with a third party. If you do not wish to receive such contact, please write to the Marketing Manager GoldCore, 63 Fitzwilliam Square, Dublin 2 marking the envelope 'data protection'

GoldCore Archive

© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules