This week saw two huge developments in the gold and silver world. Earlier in the week Germany request that its 3,396.3 tons of gold be transferred from being held abroad to local storage. Germany right now is one of the top 4 holders of gold as a reserve in the world.
Merely days later Switzerland also announced that they were seriously considering moving their 2,590 tons of gold that are currently being held abroad back to Switzerland. In fact, the Swiss parliament will be considering three different initiatives. First, the government would require that all Swiss gold must be held in Switzerland. Second, the government would be prohibited from selling any of the Swiss gold reserves. Third, the government would be required to always keep 20% of all the country’s reserves in gold. Switzerland currently is the worlds fourth larger holder of gold reserves.
Both of these steps are huge in the international community. In the past, most countries have never physically held their gold. Why? Most countries never saw a need to do it. As long as the global economy was perceived to be stable there was no reason for the gold to be held domestically. The fact that two of the top four gold holders are now deciding or considering moving their gold back to their own countries show that both countries are losing confidence in the stability of the global economy and recognized the need to have their reserves at home.
Both of these statements from the Swiss and Germans comes only months after Venezuela chose to have their 100 tons of gold returned to Venezuela from England. As the financial system continues to deteriorate don’t be surprised if we see more and more countries determine to hold their gold domestically.