Austria withdraws 140 tonnes of gold from London

Austria's central bank will withdraw a total of 140 tonnes of gold from London over the next five years, according to the Guardian. In doing so, the central bank is following the advice of the Austrian regulator, which had previously issued a warning about the fact that the central bank holds most of its gold abroad.

Austria's central bank has a total gold reserve of 280 tonnes worth €9.75 billion, 80% of which is held in London.  That percentage will be gradually reduced to 30% over the next five years, to the benefit of the gold reserves in Austria and its neighbor Switzerland. In five years' time, 20% of the gold reserve must be in Switzerland and 50% in the vaults of the Austrian central bank.

'Risky location policy'

The regulator wrote in its report on Austria's gold holdings in February that it was too risky to hold a large part abroad. Until then, the central bank had defended its location policy by arguing that gold can be traded more easily in London than in Austria. This is remarkable, because the Austrian central bank has not sold gold since 2007 and last May it re-signed the fourth Central Bank Gold Agreement.

The transport of gold from the vaults in London to Austria's central bank is likely to be handled by Brink's, G4S, Malca-Amit or VIA-MAT, the four biggest names in precious metals storage. It is likely that the transport will be flown to Austria and Switzerland in packages of 5 tonnes. Austria's central bank confirmed that it will begin repatriating the gold in the summer. A total of 92.4 tonnes will be shipped to Austria and another 47.6 tonnes to Switzerland.

Central banks bring back gold

Austria is following the example of Germany and the Netherlands, which also returned part of their gold reserves to their own country last year. In Switzerland, too, there was a call to bring back gold from abroad, but that initiative did not receive support from the majority of the population.