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The German central bank is currently repatriating much of its overseas gold, but part of the reserves is going to stay abroad. It was a scare from Germany’s Federal Audit Office that the public actually paid attention to. In 2012 financial controllers said they were unsure whether the gold reserves of Germany’s Bundesbank actually physically existed.
The Federal Audit Office demanded the central bank make regularly spot checks so that gold reserves abroad should be “physically counted and their authenticity and weight” confirmed. We’re not talking peanuts here. Following the United States, Germany has the world’s largest gold reserve, constituting two-thirds of German currency reserves. And in 2012, around 70 percent of the total of 3,378 tons of the precious metal (total value around €119 billion or $132.98 billion) was in the vaults of foreign central banks.
The Bundesbank took the suggestion to heart and discretely transferred 300 tons of gold stored in the vaults of the US Federal Reserve to Frankfurt over the past years. Over 100 tons were brought home in 2016 alone.
This year, the plan is to continue to increase gold reserves at home. To make that happen, the Bundesbank is removing its complete reserves from neighboring France. It has planned to cart 91 tons of gold under the strictest security conditions from the Banque de France to Wilhelm-Epstein-Strasse in Frankfurt by the end of this year. Altogether the Bundesbank wants to have close to 680 tons from abroad back in Germany’s own vaults.
That means 50 percent of Germany’s gold will still be stored abroad. It’s a deliberate decision. While intention was once to safeguard the precious metal from Soviet access during the Cold War, today it serves as a national shield against possible currency crises.
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