Romania wants to recover gold stocks?

Following in the footsteps of a number of other European countries Considering Romania is now also recovering its gold reserves from its own country. The leader of the largest political party, Liviu Dragnea, has introduced a new bill that would oblige the central bank to keep 95% of its gold reserves at home.

If the bill passes, the central bank will have to recover about 61 tonnes of gold from London. Romania has a total gold reserve of 103.7 tonnes, of which about 60% is stored at the Bank of England. Compared to surrounding countries, the country has a substantial gold reserve.

The bill states that in the current economic landscape, there is no reason to hold so much gold abroad. There would also be significant costs involved to store it at the Bank of England, while the gold can also be stored domestically, according to Dragnea.

More countries are recovering gold reserves

In recent years, several countries have withdrawn their gold reserves from their own countries. Germany and the Netherlands started doing this a few years ago, and later Austria and Hungary followed suit. Also, some European countries have added precious metals to their reserves, such as Hungary and Poland.

Several countries are withdrawing their gold reserves due to increasing economic and geopolitical uncertainty. The precious metal is seen by central banks as the safest reserve, because it has no counterparty risk. Incidentally, this argument only applies if the precious metal is actually held at the bank's own central bank.

It recently became clear that the storage of gold in another country is not free of risk. Venezuela wanted to withdraw some of its stock from London, but the Bank of England Refused release it. Whether this incident is a reason for Romania to remove gold, it is difficult to say. However, we do see a clear trend of countries recovering and expanding their gold reserves. In doing so, they lay a Solid foundation under the gold market.