Gold By Country:
2013 Demand: 121 tonnes
Jewelry/Coin & Bar Demand: 0 tonnes/121 tonnes
Reserves: 3,387.1 tonnes
% of Total Forex Reserves: 72.99%
2013 GDP: $3.88 trillion
During the recent economic downturn, the countries that comprise the European Union were some of the hardest hit nations of the industrialized world. However, while many of the member states were threatening default on government debt, Germany was a pillar of strength that guided the EU, as a whole, to more solid monetary ground. Germany currently holds the largest stockpile of gold reserves in Europe, and is second only to the United States worldwide. From its growing and vibrant manufacturing sector to its massive gold reserves, Germany projects an image of strength that is sorely needed during tough financial times such as these.
Germany, being the largest economy in Europe, has sought over the last decade to reinforce and strengthen its position as the economic leader of the European Union. Currently, its government holds the largest reserves of gold in Europe, and the second largest in the world, behind only the United States. In the last year, the German government has moved to consolidate their gold reserves from their strategic positions in London, New York, and Paris, a move that has many speculating that the German central government foresees a diminished role of the United States as a monetary authority.
Germany is home to some of the world’s largest and most well-known mining, refining, and retailing companies worldwide, including Heraeus Precious Metals, Degussa Gold and Silver, as well as Pearl Gold Mining Corp. Interestingly, most of these companies specialize in many areas other than gold refinement, applying their expertise in gold refinement to the development of specialized chemicals, among other things. Much like the German government's desire to stay well diversified in its currency holdings, German gold companies seem to have a tendency to diversify themselves across many industries.
German citizens have a negligible demand for gold jewelry, yet one of the higher demands for investment grade coins and bars. The reason for this large asymmetry is that the German central government deliberately discourages the purchase of such luxury items through added taxes and tariffs. All jewelry purchased by German citizens is subject to a 19.5% sales tax, as well as a 2.5% tariff on the items which are imported. However, their policies regarding the purchase of investment-grade gold bullion, such as coins and bars, are much more liberal.
Did You Know?
Traditional German and Austrian attire is known as tracht (plural: trachten, meaning “costume”), and is often worn on special occasions to demonstrate cultural solidarity among German-speakers, or simply to celebrate a national event such as Oktoberfest. In southern towns such as Passau, near Bavaria, goldhaubes (gold hats) are part of traditional tracht. These intricate caps are made with silk or linen that is interlaid with gold thread. They sometimes are further accented with gold leaf and pearls. The Germans have a long history of trading and refining precious metals; behind Switzerland, Germany is home to some of Europe's most respected refiners such as Heraeus, whose KineGram technology can make gold bars more secure and visually spectacular at the same time. While this push toward modernity is part of Germany's role as a leader in Continental Europe, nostalgia remains over historic Prussian gold coins and the German 20 mark gold coins of the late 19th century.