A new survey by Invesco of sovereign wealth funds and central banks that was published on Monday showed that an increasing number of nations are repatriating their gold reserves to try and shield them from retaliatory political sanctions such as those deployed by the Western powers against Russia following the onset of the war in Ukraine.

Sovereign money managers suffered widespread losses amid the rout in the financial markets last year, and this has led many to fundamentally rethink their strategies based on the assumption that we are entering a period where higher inflation and geopolitical tensions will be more permanent features.

85 sovereign wealth funds and 57 central banks were surveyed by the Invesco Global Sovereign Asset Management Study. More than 85% of them reported believing that in the coming decade, inflation will remain higher than in the past decade.

Normally such managers would favor gold and emerging market bonds in such an environment. However after seeing nearly half of Russia’s $40 billion worth of gold and forex reserves seized by the Western powers in response to the war in Ukraine last year, the conventional wisdom appears to have shifted.

According to the survey, a “substantial share” of the central banks worried that the seizure represented a new precedent. Nearly 60% reported that it made gold more attractive, and 68% reported that they were now maintaining their reserves within their home countries. In 2020 that figure had been merely 50%.

Quoted anonymously, one central bank said, “We did have it (gold) held in London… but now we’ve transferred it back to own country to hold as a safe haven asset and to keep it safe.”

Invesco’s head of official institutions, Rod Ringrow, who helmed the report, said that view is broadly held, adding, “‘If it’s my gold then I want it in my country’ (has) been the mantra we have seen in the last year or so.”