After decades of storing the majority of its gold reserves overseas, Germany has decided to speed up efforts to bring its bullion back home.
The Bundesbank, the country’s central bank, said Wednesday it transferred around 110 metric tons of gold from Paris and just under 100 tons from New York to its Frankfurt vaults last year, turning the city into the main storage site for Germany’s reserves.
“The transfers are proceeding smoothly. We have succeeded in once again significantly increasing the transport volume compared with 2014,” Carl-Ludwig Thiele, member of the Executive Board of the Deutsche Bundesbank, said in a statement.
Germany began building most of its gold holdings in the 1950s, when trade surpluses were exchanged for gold under the Bretton Woods system that linked the US dollar to the precious metal. That led to a build-up of gold in vaults overseas, especially in New York, under the Federal Reserve.
During the Cold War the Bundesbank wanted to keep its gold in the west in case of an invasion from the Soviet Union.
But since 2013, it has been repatriating its gold bars. So far it has brought around 366 tonnes of gold back to Frankfurt, roughly half of the total to be transferred, the Bundesbank said.
In October, the bank released a detailed 2,300-page inventory of every single bar it held stored in vaults in Frankfurt, London, Paris and New York.
Bundesbank plans to bring another 307 tons of the precious metal home in the next five years. That means slightly more than half of Germany’s gold will be stored within the country by 2020, about a third at the Federal Reserve and the remaining 13% at the Bank of England. None will be located at the Central Bank of France, even though the country is Germany’s closest political ally in the euro zone.
Germany’s gold holding, which is valued at roughly $130 billion, is the second biggest in the world, after the United States. The German reserve is about twice that of China, according to the World Gold Council, an industry body.