Germany May Withdraw Its Gold from US Amid Global Uncertainty

According to the Telegraph on Friday, Germany may consider returning the huge amount of gold it now keeps in New York due to concerns about US President Donald Trump’s unpredictable tariff policies.

Citing a previous report by German newspaper Bild, the UK-based paper claims that several senior members of the Christian Democratic Union (CDU), which is expected to form the next German government following its election victory in February, have been debating the possibility of removing its gold stockpile from the US.

At roughly 3,350 tonnes, Germany currently holds the second-largest gold reserves in the world, behind only the United States, which possesses 8,100 tonnes.

Germany’s desire for gold has been well documented due to its stormy history. The country’s bullion vaults were essentially emptied after its defeat in World War II. However, a post-war economic boom, made possible by the Bretton Woods system, provided the financial means for it to start storing the yellow metal.

Germany was one of the biggest gold holders in the world by the 1960s, and almost all of its reserves were kept outside, in New York, London, and Paris, to be easily accessible in the event of war. The degree of trust it had established with its Western friends, especially the US, was the motivation behind the decision to deposit that gold aboard.

However, among members of Germany’s future ruling party, that trust might have decreased given the current geopolitical climate.

Last week, Markus Ferber, a CDU member of the European Parliament, told Bild that “German officials must be allowed to personally inspect its bullion” kept in the United States.

As early as 2012, outgoing CDU lawmakers Marco Wanderwitz expressed similar worries. He attempted to persuade the Bundesbank to either take on a more active position as a custodian at the time by lobbying for a visit to the gold reserve, but his request was turned down.

The German central bank initiated a plan to repatriate a portion of its gold reserves held abroad, aiming to have at least 50% of its gold stored domestically starting in 2020. This initiative led to the return of 300 tonnes of gold from New York and approximately 374 tonnes from Paris to Frankfurt.

Currently, Germany retains around 1,200 tonnes, which constitutes about one-third of its total gold reserves, in the vaults of the New York Federal Reserve in Manhattan, along with an additional 430 tonnes held by the Bank of England. At today’s market rates, the gold stored in the U.S. is valued at over €100 billion.

Michael Jäger, a representative of the Taxpayers Association of Europe, has expressed that it would be preferable to expedite the transfer of all German gold reserves to Frankfurt or at least to Europe.

The New York Federal Reserve, recognized as the largest gold custodian globally, manages approximately 6,300 tonnes of gold for over 30 foreign central banks. Besides Germany, notable European nations like Italy and Switzerland also keep their gold with the New York Fed.

Earlier this year, Bundesbank President Joachim Nagel emphasized that “We have (…) no doubt that the New York Fed is a trustworthy and reliable partner for the storage of our gold reserves.”