Bundesbank to Repatriate Gold from Vaults in NY and Paris


Germany’s central bank will repatriate part of its $200 billion gold reserves stored in vaults in the United States and in France, according to reports by the German press.

According to Handelsblatt, a respected German publication, Germany's central bank plans to retrieve some 1,500 tonnes of gold stored in the vaults of the Federal Reserve in New York as well as its 450 tonnes of gold with the Bank of France in Paris.

The Bundesbank declined to comment on the report but will on Wednesday present a new management plan for Germany’s 270,000 gold bars, the world’s second-largest stockpile trailing only the United States.

The Bundesbank's overall gold reserves of 3,400 tons are worth about $200 billion at current market rates. Like most central banks, Germany stores part of its gold reserves in foreign vaults and approximately two-thirds of Germany’s gold have been stored abroad since the Cold War over fears of a Soviet invasion.

However, the Handelsblatt report comes months after Germany’s Federal Court of Auditors, which oversees the government’s financial management, called for the physical audit of the country’s foreign gold reserves, in accordance with commercial law, because its full value has never been verified.

The Bundesbank does not consider it necessary to count the gold bars or check their gold content itself and instead considers written assurances sent by its partner central banks sufficient.

The Bundesbank said in a statement last May:

From these central banks, the German Bundesbank annually gets confirmation of the gold holdings in troy ounces as a basis for its accounting. There is no doubt about the integrity and the reputation of these foreign central banks where the gold is held.

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But the debate on the gold reserves has caused some inevitable conspiracy theories questioning their very existence.

Spiegel, a German weekly, reported in May that some in Germany had been campaigning for the repatriation of the country’s gold bars. Called the “Gold Action” initiative, the campaign alleges that there is an “acute” danger that German gold could be expropriated as a result of the global financial and debt crisis, and activists are concerned that the German government – also the eurozone’s paymaster – could soon be forced to sell its gold to cover the costs of the crisis.

On Monday, PIMCO co-founder Bill Gross tweeted:

Report claims Germany moving gold from NY/Paris back to Frankfurt. Central banks don’t trust each other?


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