Germany Ramped Up Gold Repatriation in 2014

The German central bank (Bundesbank) repatriated 120 metric tons of gold in 2014. 85 of those tons came from the New York Federal Reserve, which held nearly half of Germany’s gold at the time. This is in sharp contrast to repatriating just 37 tons in 2013 – only 5 of which came from New York. It would appear that Germany is quite serious about getting its gold back after all.

At the beginning of 2013, the Bundesbank announced that it would begin the process of repatriating massive amounts of its physical gold reserves back into Germany. The goal is to have half of its gold back in Germany by 2020. Currently, nearly 65% of its reserves are stored in the New York Federal Reserve, the Bank of England in London, and in the Banque de France in Paris. New York alone holds almost 43% of Germany’s gold:

To many physical gold investors this news suggested that one of the healthiest economies in Europe and the world was preparing for a currency crisis. Some analysts even thought that Germany distrusted the United States in particular. After all, the repatriation announcement came just months after the Fed denied Germany’s request to conduct their own physical inspection of the Fed’s gold reserves.

Whether or not Germany is getting its original gold back is still not clear. Some have suggested that the US has “rehypothecated” its holdings of foreign country’s reserves. This means that the US could have used Germany’s gold as collateral on debts to other countries. There is no hard evidence for this, but it is one concern of the German public, which has been pretty vocal about getting its gold back.

Whatever the case may be, Germany is clearly taking the repatriation effort seriously, even if it got off to a slow start in 2013. Here’s the current progress of the Bundesbank’s gold repatriation:

Germany is not the only European country taking a closer look at their foreign gold holdings. Read this. One thing is for sure – when central banks are publicly interested in acquiring more gold, private investors should take a serious look at their own safe haven strategy.

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