Germany is contemplating the withdrawal of its substantial gold reserves from the United States, a move prompted by escalating concerns over US policies under President Donald Trump that are perceived as adversarial towards the European Union.
According to The Telegraph, for decades, Berlin has stashed 1,200 tonnes of its famous gold reserves, the second largest on the planet after those of the United States, in a vault deep underground at the US Federal Reserve in Manhattan.
This development hints at the growing unease in Berlin regarding the security and autonomy of its financial assets amid shifting international relations.
Gold rush
Germany has one of the largest gold reserves in the world -- totalling up to 3,374 tonnes. According to The Bild, a popular German tabloid, there are 270,000 bars of 12.5 kilogrammes each and their value is currently at a record high: around 280 billion euros.
According to The Telegraph, Germany’s riches were earned after World War Two, when exports surged resulting in large trade surpluses with other nations.
These surpluses were converted into gold under the Bretton Woods system.
Historically, a significant portion of this gold has been stored abroad, primarily in the United States, the United Kingdom, and France. This practice originated during the Cold War, aiming to safeguard assets from potential geopolitical threats. Over the years, the Bundesbank has undertaken efforts to repatriate portions of these reserves to ensure greater control and transparency.
Keeping the gold reserves in the United States was seen as a sensible step as it provided Berlin with access to dollar liquidity, should it be needed in a severe downturn.
Facing tariffs on €380 billion of exports, the EU vows to negotiate earnestly with the US while preparing countermeasures, diversifying global trade ties, and ramping up protective steps for its single market.
Safekeeping
The conversation to move the gold reserves has been gaining momentum – particularly after Elon Musk, tech mogul and close aid of President Trump, suggested that an audit of Fort Knox in Kentucky be “livestreamed.” The last time Fort Knox was audited was in September of 1974.
According to Michael Jäger of the European Taxpayers’ Association, a federation of 29 national taxpayers associations throughout Europe, Germany should obtain its gold from the United States amid tension between the White House and the US, Bild reported.
“The Bundesbank and the German government must demonstrate foresight in this phase of global power shifts and immediately retrieve German gold from the USA,” he told Bild. “Especially at a time when Berlin and Brussels are discussing immense new debt, we need immediate access to all gold reserves in an emergency.”
Jäger added that at a minimum, Germany should at least be able to “physically inspect” the gold bars.
European Member of Parliament Markus Ferber seconded Jäger’s view and told Bild that he demanded regular checks of Germany’s gold reserves. “Official representatives of the Bundesbank must personally count the bars and document their results,” he added.
A lawmaker from Germany’s Christian Democratic Union which is set to lead the next German government, Marco Wanderwitz, suggested that Germany needs to “either check regularly or retrieve the gold.”
According to The Telegraph, Wanderwitz has long advocated for a policy that would allow German officials to regularly inspect the gold – or for withdrawing it completely.
He has previously lobbied to visit the gold reserves and personally inspect them, but his request was rejected in 2012.
However, in a statement to Bild, a spokesperson for Germany’s Bundesbank quoted and reiterated a February statement from the bank’s President, Joachim Nagel.
“We have (…) absolutely no doubt that with the Fed in New York we have a trustworthy, reliable partner in the storage of our gold reserves.”
Strained relations
Should Germany proceed with the withdrawal of its gold reserves from the US, it would signal a significant shift in international financial relations. Such a move could prompt other nations to reevaluate the security of their foreign-held assets, potentially leading to a broader trend of repatriation.
