Countries like Nigeria are making headlines by bringing their gold reserves back home from places like the United States and the United Kingdom. This move is seen as a way to protect their wealth and strengthen their economies amidst global uncertainties. Economic concerns, including inflation and geopolitical tensions, have prompted Nigerian officials to repatriate 21 tons of gold, asserting greater control over their financial assets. The trend isn’t limited to Nigeria; other countries have also started bringing their gold reserves back within their borders to minimize risks associated with foreign policy and ensure the security of their precious metals.
As reported by The Star, Nigeria is sending its gold stockpiles home to keep them safe.
According to The Star, Nigerian officials decided to repatriate the country’s gold in April “to mitigate risks associated with the weakening U.S. economy.”
“Economic indicators such as rising inflation, escalating debt levels, and geopolitical tensions have raised apprehensions among Nigerian policymakers about the stability of the U.S. financial system.”
Nigeria has around 21 tons of gold in its reserves.
According to economist Fatima Abubakar, the gold repatriation plan is “a strategic decision,” and the country is taking “proactive measures to safeguard its wealth and strengthen its financial resilience.”
Nigerian officials also stated that bringing gold home would demonstrate the country’s self-reliance.
“By bringing its gold reserves back within its borders, Nigeria not only asserts greater control over its financial assets but also demonstrates prudence in managing economic risks amidst global uncertainties.”
Nigeria is not the only country that wants to control and bring its gold reserves back home. India recently returned 100 tons of gold from vaults in the United Kingdom.
Many countries have expressed worry that the United States and Western powers are utilizing gold and dollar reserves as a foreign policy tool.
According to a World Gold Council survey conducted in 2023, a “substantial share” of central banks voiced anxiety about prospective penalties after the United States and other Western countries froze about half of Russia’s $650 billion gold and FX holdings following its invasion of Ukraine. According to the WGC, 68 percent of questioned banks intend to keep their gold holdings within their country’s boundaries. That was up from 50% in 2020.
According to an anonymous central bank official reported by Reuters, gold was previously housed in London but has now been moved back to the country for safekeeping.
Rod Ringrow, Invesco’s head of formal institutions, told Reuters that this is a widely held position.
“‘If it’s my gold then I want it in my country,’ has been the mantra we have seen in the last year or so.”
There has been conjecture that countries have moved gold and other assets out of the United States in response to economic sanctions against Russia, but this has been difficult to establish because the Federal Reserve refuses to divulge information about the amount of gold in its vaults.
In March, Federal Reserve Chairman Jerome Powell skirted questioning from West Virginia Republican Rep. Alex Mooney concerning the central bank’s foreign gold holdings. Federal officials also failed to comply with a Freedom of Information Act request for records on such holdings.
According to investigative reporter Ken Silva, following Powell’s evasive response, Headline USA filed a FOIA request with the Fed for records indicating how much gold the Federal Reserve Bank of New York currently holds in its vault, as well as records indicating the ownership stake that each of FRBNY’s central bank/government clients has in that gold. The FOIA request also sought information on the Fed’s gold holdings before Russia’s February 2022 invasion of Ukraine.
The Fed declined the request.
The gold repatriation trend began far before the West imposed sanctions on Russia. In 2019, Poland brought in 100 tons of gold. Hungary and Romania also returned some of their gold reserves at the same period. In the summer of 2017, Germany completed an initiative to bring around half of its gold reserves back within its borders. In 2015, Australia began steps to bring half of its reserves home. The Netherlands and Belgium have also launched repatriation initiatives.
This gold repatriation trend highlights the need to store physical gold away from counterparty risk.
If you keep your gold and silver with a third party, you risk losing the metal due to theft, fraud, or an act of God. Of course, you could lose silver and gold held at home in the same way (except fraud), so you must consider the risks of employing third-party storage vs retaining substantial amounts of silver and gold at home.
If you choose third-party vaulting, make sure to select a reputable company.
Recently, GreatGameIndia reported that, according to the Times of India, India’s central bank, the RBI, has moved 100 tons of gold from the UK to domestic vaults because the stock was increasing abroad.
