Where is Austria´s Gold?

Where is Austria´s Gold? / Picture: © Vindobona.org

The inhabitancy of Austria´s gold reserves is kept as state secret. Only the Austrian Central Bank (OeNB) knows the exact amount of gold reserves and the inhabitancy. Most of the Austrian gold reserves are not physical assets, but receivables. It is usual to lend gold to banks against low interest rates. In the balance sheet of Central Banks, there is not difference between “real gold” and “gold as receivables”.

Officially, the Austrian state has 280 tons of gold, which corresponds to a current market value of € 11.0bn. This amount equals about 60% of the foreign exchange reserves. Not only the inhabitancy of Austria´s gold reserves is being kept as secret, but also those of Switzerland and Germany. What is known however, is that the major part is located outside the countries. Market insiders say that the Federal Reserve in New York stores foreign gold reserves, another major gold trading center is London. About 60 countries have stored a part of their gold reserves in New York.

Among others, the Austrian economist Gegor Hochreiter claims to bring back Austrian gold reserves: “These reserves are national wealth. And they should be kept within the borders. We live in a monetary union which is anything else than stable. Thus, we must be cautious.”

OeNB refuses to tell the inhabitancies of Austrian gold reserves. The official statement: “We make gold deals only with well-respected banks against excellent securities and a corresponding coverage. OeNB never had a credit default due to gold deals.”

Also the Ministry of Finance could not give a useful answer to a parliamentary inquiry by the opposition party FPÖ. The Ministy of Finance refers to OeNB´s independence. As a result, it must be supposed that nobody else than OeNB knows about the inhabitancy of the domestic gold reserves.

From 2000 to 2006, Austria´s government, which was led by Wolfgang Schüssel (ÖVP) sold about a third of the nation´s gold reserves. At that time, the gold price was historically low. The major part of the sales was observed in 2000 and 2001, exactly when the former Minister of Finance Karl-Heinz Grasser aimed to reach the “zero deficit”. About two million ounces gold were sold in the first two years of the ÖVP-led government.

At the moment, gold is the only “safe harbor” for many investors. Countries like China, Russia and India are raising their gold reserves massively. “Zhang Jianhua at the Chinese National Bank commented last year: “The only way to insure against risks it to buy gold.”