Yet in a world of re-hypothecated, just-in-time gold, this makes complete sense. Here’s an update on Hungary’s newly returned gold reserves…
Editor’s Note: At least you can see the markings on the gold, unlike the Photoshop shenanigans they played with Germany’s gold:
From the Hungarian Central Bank and translated into English by Google:
The gold reserves of the country have returned
Budapest, March 6, 2018 – Hungary’s gold reserves returned to Hungary. Approximately 100,000 ounces (about three tonnes) of precious metal came from Budapest to Budapest. At the current exchange rate, the $ 130 million central bank gold reserve was decided in full agreement by the leadership of the Hungarian National Bank. In the central bank’s view, the possession of gold reserves within the country, which is in line with international trends, can further strengthen market confidence in Hungary.
In recent years, the repatriation of a definite gold reserve in many countries. Foreign management of the gold reserve was increasingly risky by an increasing number of central banks, so in recent years the management of the Dutch, German and Austrian central banks decided to partially repatriate gold reserves. An important consideration has been the fact that gold stocks are organized and that gold reserves are kept in locations that, in the case of geopolitical crises, also provide security.
The National Bank of Hungary has been holding gold reserves since its founding in 1924. The amount of this amount increased continuously in the II. until the end of January 1945, about 30 tons of gold balloons and gold were delivered by the MNB “Gold Train” to the Spital am Pyhrn in Austria. This quantity was fully recovered after the war in 1946.
Based on the available data, in the first half of the seventies the amount of domestic gold reserves rose to 65-70 tonnes, which decreased to around 50 tonnes in 1989. In the period following the break-up of the Bretton Woods gold evasion system, significant changes in gold reserves were influenced by investment and speculative considerations. At the end of the 1980s, it was decided that the Gold Bank of the National Bank should be reduced to the minimum level. This meant, in a short time, that gold reserves shrunk to 10 tonnes, and then declined to around 3 tonnes in 1992.
At the beginning of the nineties, the MNB – in accordance with the then international practice – invested foreign currency in gold for foreign securities denominated in foreign securities with safer, liquidity and even higher yields. However, the 2008 global financial crisis has basically translated the behavior of the central banks on gold reserves. Gold is not merely an investment product for central banks, but is a strategic tool that is conducive to confidence in the country both abroad and domestically. In this way, the traditional reserve asset has repeatedly an economic strategy role.
This process is in line with the decision of the Hungarian National Bank that the time has come to bring home the gold reserves of the country, which we have full rights and authority over.