Turkey is repatriating its gold reserves from the United States. According to unconfirmed Turkish sources, the country has repatriated all of its gold reserves deposited in the vaults of the U.S. Federal Reserve, totaling 220 tons. This was reported by Kitco News last week.
Turkey's gold reserves are currently the eleventh largest in the world after India. According to the Turkish central bank, the value of its gold reserves is $25.3 billion.
According to Kitco analysts, Turkey's move is likely politically motivated rather than economic. They agree that this is Turkey's way of signaling to the United States about President Erdogan's currency prioritization.
Earlier this week, Erdogan reportedly demanded that loans from the International Monetary Fund (IMF) be repaid in gold rather than dollars:
"Debts should be tied to gold, as there is no equal to gold karat. The dollar is constantly being used to create currency pressure in the world. We must save states and nations from this currency pressure."
The benefits of owning gold are unique, as the markets for the yellow metal are international, explains George Gero, a director at RBC Wealth Management, in a Kitco article. According to him, many countries want to take possession of their gold – especially if there is fear of inflation in the air.
The trend of repatriation is becoming more common
With the repatriation of its gold reserves, Turkey joins Germany and Hungary. Germany kicked off the repatriation trend last summer by repatriating 674 tons of gold from the Fed's reserves in New York and from the vaults of the French central bank three years earlier than planned. This topic was also covered by Taloussanomat and reported that Germany had stored its gold reserves abroad during the Cold War out of fear of the Soviet Union.
Hungary followed in Germany's footsteps in March when the country's central bank announced it would repatriate 100,000 ounces of gold from London. According to local media reports, the reason given was to strengthen market confidence.
According to an expert from Kitco News, the reason for repatriating gold reserves may also be the fear that gold ETFs are overallocated. Many countries do not trust the system as a whole, but for some reason, this has not yet reflected in the price of gold, Kitco News states.
Source: Kitco News, Is Gold Repatriation A Trend? Turkey Gets Its Reserves Back From The U.S. – Reports
