While the world is facing inflation, tariffs from the US, geopolitical conflicts and a devaluation of the US dollar - which just had its worst first half of the year since 1973, many countries are looking to withdraw gold from US and European reserves to bring back home.
According to the World Gold Council (WGC), many central banks in European countries such as Germany and Italy have begun to consider bringing hundreds of tons of gold from the US and UK back to their countries. Some other major countries such as India, China, Switzerland and France have also been or are in the process of returning to gold.
Germany and Italy are among the countries with the largest gold reserves after the US, holding 3,352 tons and 2,452 tons respectively. More than a third of their gold bullion is stored in the US. The wave of calls for audit and transparency of Fort knox gold warehouses in the US is emerging as many people are skeptical about whether all of the gold is still stored safely as claimed.
India has withdrawn all of its gold deposits in London in 2024. Turkey has made an early move since 2018. During the tenure of Finance Minister Berat Albayrak, Turkey withdrew about 350 tonnes of gold from central banks in the US, UK and Switzerland to store at the Turkish Central Bank (CBRT).
At the US Federal Reserve (Fed) alone, Turkey's gold has fallen from 28.7 tonnes (in 2016) to zero (in 2017). At the same time, all 18.7 tons of gold deposited at the Bank for International payments (BIS) in Switzerland were also repatriated.
As a result, Turkey's gold reserves have increased from 120 tons (in 2002) to 488.9 tons (late 2018) and continued to soar to 719.2 tons in 2020. This move helps strengthen confidence in the economy during times of global fluctuations.
According to the latest data of the week as of June 20 from CBRT, Turkey's gold reserves have reached 85.1 billion USD, surpassing foreign exchange reserves by only 70.7 billion USD. This is a big turning point compared to 2018, when gold only accounted for 19.9 billion USD and foreign exchange reserves were 71.9 billion USD.
According to the Official Financial Institutions Forum (OMFIF), global central bank gold reserves could surpass the historical peak in 1965 (38,000 tons), reaching 38,300 tons in 2026.
As geopolitical fluctuations show no signs of stopping, gold is not just a commodity, but is gradually becoming an economic "hammock", reshaping the global monetary system, in which Turkey is one of the pioneers.
