Turkey’s economy has been in a tailspin with an inflationary currency, but the country is using something rare to help stabilise itself: gold.

In late 2011, Turkey started to allow commercial banks to use gold instead of the Turkish lira for their required deposits at the central bank. These deposits are known as reserve requirements and help ensure that the banks are capitalised.

Over the past six-or-so years, Turkey’s central bank has accumulated an additional 400 metric tonnes of gold.

The Turkish government has made the decision to repatriate all of its gold reserves that are currently housed in the US Federal Reserve System.

This is a dramatic move reflecting an international trend.

Few people believe the US Treasury’s assurances that the 261 million ounces (roughly 8,100 tonnes) in official gold reserves that are stored in Fort Knox and other places are fully audited and accounted for. The Federal Reserve has never been fully and independently audited. The pressure for a full, independent audit of all US gold reserves has always been resisted by the government and in Congress. Nobody knows if the gold is really there. What if the vaults turn out to be empty? It’s wiser to bring your gold home while you can, rather than to just keep on wondering.

In September 2011, Venezuela had $21.269 billion in gold reserves. After a rash of selling gold in Switzerland to pay bonds maturities and coupons in early 2016 (which we tracked assiduously and reported on in these reports), Venezuela's gold reserves had fallen to $7.7 billion where they held steady until November 2017. But as we reported in October of 2017, there were loans backed by gold that Venezuela had taken out that were coming due. As we reported last month, in the last two months of 2017, Venezuela had lost $1.1 billion in gold and reported that they held $6.6 billion in gold on December 31. In January, Venezuela's gold reserves fell another $500 million.

As of January 31, Venezuela had just $6.1 billion in gold reserves, down another half billion from the $6.6 billion Venezuela reported a month earlier on December 31. In short, Venezuela burned through $1.6 billion of its gold reserves in 3 months, and it is important to note that this fall in gold reserves is without Venezuela paying its bond debts.

Turkey’s Central Bank has transferred its gold reserves stored in the US Federal Reserve System to Turkey, Turkish media reported April 19, citing sources in the government.

The total volume of the gold reserves of Turkey’s Central Bank stored in the US was 220 tons.

Other Turkish banks, Ziraat and Vakifbank, have also started transferring a gold reserve of 95 tons from the US to Turkey.

Turkey’s central bank withdrew gold reserves it held at the U.S. Federal Reserve and placed them at the Bank of International Settlements and the Bank of England amid a political crisis with the United States, Hurriyet columnist Uğur Gurses said citing a central bank report.

If Germans have any doubts about the authenticity of their gold and some of them really do their central bank is doing all it can to qualm their concerns.

Germany’s Bundesbank this week launches a nearly six-month exhibition on gold, which will showcase the most interesting gold bars and coins in the central bank’s collection. That follows its release earlier this month of a book on “The Gold of the Germans”, which “for the first time shows readers the gold bars in such a way as if they were held in their own hands,” according to board member Carl-Ludwig Thiele.

Eye Candy

The leadership of the Hungarian National Bank (MNB) has decided to bring back home Hungary’s gold reserves. Up to now, 100,000 ounces (3 tons) of the precious metal were stored in London, which is in total worth some 33 billion forint ($130 million) at current gold prices.

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. Austrian, German, and Dutch central banks are among those who have recently decided to repatriate their gold reserves. According to MNB, this may also further strengthen market confidence towards Hungary.

Russia is the largest gold buyer in the world, and purchases by Russian banks have increased substantially in recent years.

Last year, Russian banks bought 205.155 tons of gold, which is 4.7 percent more than in 2016 (195.89 tons), and approximately 67 percent of all gold produced in Russia. This is also a 13 percent increase compared to 2013.