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German Bundesbank Wants Its Gold Back Again

Stacked Gold BullionCurrently, the Federal Reserve Bank of New York holds 45% (1,536 metric tons) of Germany’s gold reserves. The remainder is held in London (13%), Paris (11%) and Frankfurt (31%).  In the past, The Fed has denied German requests to audit their own gold “in the interest of security.”  In 2007, German representatives were allowed to see the storage facility, but were not allowed to see the gold.  In 2011, German representatives were allowed to view a few bars from one of the nine compartments that supposedly hold Germany’s gold.  Again in 2012 there were discussions of German gold repatriation. And now, according to Handelsblatt yesterday, the German Bundesbank is developing a new approach as to where its gold will be stored. In the future, the bank will hold less gold in the New York Fed, and no gold in Paris.  A full announcement is expected Wednesday.

UPDATE

January 16, 2013

Here is the official statement from the Bundesbank:

By 2020, the Bundesbank intends to store half of Germany’s gold reserves in its own vaults in Germany. The other half will remain in storage at its partner central banks in New York and London. With this new storage plan, the Bundesbank is focusing on the two primary functions of the gold reserves: to build trust and confidence domestically, and the ability to exchange gold for foreign currencies at gold trading centres abroad within a short space of time.

The following table shows the current and the envisaged future allocation of Germany’s gold reserves across the various storage locations:

  31 December 2012 31 December 2020
Frankfurt 31 % 50 %
New York 45 % 37 %
London 13 % 13 %
Paris 11 % 0 %

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