22 January 2013

The Bundesbank repatriates its gold reserves

Germany, the holder of the world’s second largest gold reserve, last week decided to repatriate some of its 3,400 tons of gold not already in its vaults to reach 50% in 2020.

What to make about this?

The FT continues its anti-gold stance along the lines of the barbaric relic and the WSJ cites the pressure of populism.

One may also point at a sensible move to make sure that real assets are held at home. If this is true, it tells a lot about the confidence of the Bundesbank with some of its counterparts…A remake, at the central banks level, of banks distrusting each other during the financial meltdown which led to a freeze of the interbank market?

The most interesting point is that the Banque de France will end up with no German gold and The FED will see its holding decreasing by 30%, for a total consideration of 674 tons or USD 36 billion at current market price, whilst the BoE will stay at the same level. This could be a barometer of Germany’s assessment of its counterparties quality.


Deutsche Bundesbank: Deutsche Bundesbank’s new storage plan for Germany’s gold reserves