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Germany Repatriates More of Its Gold

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Germany Repatriates More of Its Gold

Slowly but surely, the German government is taking back its gold.

gold-investigationThrough a process known as "gold repatriation," Germany is arranging for its impressive stockpile of gold bullion stored abroad to be returned to the country. This movement was spurred by liberty-minded groups in Germany and is closely tied to similar efforts in nearby Switzerland. (The Swiss held a referendum last year to try and bar its central bank from selling any of its gold, among other initiatives.)

Gold Repatriation Process

Germany began bringing back its gold in 2013. The procedure began very slowly, and the reasons generally given were in regard to logistical issues. It's undoubtedly expensive and risky to transport large amounts of gold in that manner, but nonetheless, many were left scratching their heads when the Federal Reserve Bank of New York only managed to give Germany back 5 tonnes during the first year of repatriation—out of the the more than 1,500 tonnes of yellow metal stored at the New York bank.

German Overseas Gold ReservesLike many countries (and particularly one that as recently as 25 years ago was partitioned between a capitalist West Germany and communist East Germany), Germany has been storing its gold in several different locations abroad. Prior to the beginning of repatriation, 1,536 tonnes (45%) was held by the aforementioned New York Fed; another 1,036 tonnes (31%) remained in Frankfurt, Germany; 445 tonnes (13%) was stored at the Bank of England; and 374 tonnes (11%) was at the Banque de France.

germany_gold Source: CNN Money

While this type of arrangement is not terribly uncommon, it still was a cause for concern among citizens who worried that Germany's Bundesbank needed to fully secure Germany's financial independence, especially after more than 25 years as a unified country.

Repatriation Accelerated

After three years of successfully migrating its gold back home, these are the updated totals for the locations of Germany's gold holdings:

german-gold-repatriation

  • 1,402.5 tonnes (41.5%) at the Bundesbank in Frankfurt, Germany;
  • 1,347.4 tonnes (39.9%) at the Federal Reserve Bank in New York;
  • 434.7 tonnes (12.9%) at the Bank of England's vaults in London;
  • 196.4 tonnes (5.8%) at the Banque de France in Paris.

This still means that the majority (58.6%) of German gold reserves are held outside of the country. The repatriation process was originally supposed to last 7 years, meaning that Germany should have all of its gold back by 2020.

 

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