Germany may look to withdraw its gold from US

Germany may look to repatriate the vast amount of gold it currently stores in New York amid concerns over US President Donald Trump’s unpredictable tariff policies, the Telegraph reported on Friday.

The UK-based paper says that a number of senior figures within the Christian Democratic Union (CDU) party, which is slated to lead the next German government after its February election win, have been discussing the possibility of pulling its gold stockpile out of the US, citing an earlier report by German newspaper Bild.

Currently, Germany has the world’s second-largest gold reserves at about 3,350 tonnes, behind only the US and its 8,100 tonnes.

Germany’s appetite for gold has been well documented due to its turbulent history. Following its defeat in World War II, the country’s bullion vaults were essentially emptied. But a post-war economic boom gave it the financial means to begin stockpiling the yellow metal, made convenient by the Bretton Woods system.

By the 1960s, Germany had become one of the world’s largest gold holders, with much of its reserves stored abroad — in New York, London and Paris — to ensure accessibility in case of conflict. Behind the decision to store that gold aboard is the amount of trust it had built with its Western allies, particularly the US.

But, under the current geopolitical climate, that trust may have waned amongst members of Germany’s next ruling party.

Markus Ferber, a member of the European Parliament for the CDU, told Bild last week that, at the very least, “German officials must be allowed to personally inspect its bullion” held in the US.

Outgoing CDU lawmaker Marco Wanderwitz echoed the same concerns, dating as far back as 2012. At that time, he lobbied for a visit the gold reserve as part of an effort to pressure the Bundesbank to either take a more active role as a custodian, but that request was turned down.

The German central bank eventually launched an operation to bring back some of its gold stored overseas, with the goal of having at least half of its gold reserves on domestic soil from 2020 onwards. That effort resulted in the transfer of 300 tonnes back to Frankfurt from New York and about 374 tonnes from Paris.

Today, Germany still has some 1,200 tonnes, or about a third of its gold, stored in the vaults of the New York Federal Reserve in Manhattan, plus another 430 tonnes with Bank of England. At current prices, the US-held gold would be valued at over €100 billion.

Michael Jäger, a member of the Taxpayers Association of Europe, has said that it would be better to “bring all German gold reserves to Frankfurt or at least to Europe as quickly as possible”.

The New York Fed, as the world’s largest gold custodian, stores about 6,300 tonnes of gold on behalf of more than 30 foreign central banks. In addition to Germany, other prominent European economies storing their gold with the New York Fed include Italy and Switzerland.

Bundesbank President Joachim Nagel stressed earlier this year that “We have (…) there is no doubt at all that with the New York Fed we have a trustworthy, reliable partner in the storage of our gold holdings.”