German Gold Repatriation.
German gold repatriation begun in 2013, continues.
Germany is the owner of the second largest central bank gold hoard, much of it held at the New York Federal Reserve.
The majority of Germany’s gold is held abroad. The Bundesbank plan is to repatriate gold in sufficient amounts to have at least half of their gold in Germany by 2020.
Germany and other countries repatriating their gold are emptying the New York Federal Reserve’s vault.
Update May 5, 2015: Another 10 tons of gold left the NY Fed vaults in March 2015. (see chart below)
Update January 27, 2016: Frankfort becomes Bundesbank’s largest gold storage location- (see below)
Why Germany Has Much of its Gold Abroad
According to the World Gold Council Germany has 3,384.2 tons of gold, the second largest central bank gold holdings*.
Until recently, Germany stored 69% of its gold abroad in London, Paris and New York. By 2020 the German Bundesbank claims they will have half of their gold in Germany, 37% at the New York Federal Reserve and 13% in London at the Bank of England.
Jens Weidman, President of the Deutsche Bundesbank explains in this video from the Deutsche Bundesbank the historic reasons (Cold War concerns) for storing Germany’s gold abroad and the changed circumstances. He notes there is no need to have gold in France since Germany and France share the same currency, the Euro. London and New York provide geographic diversity and dollar and pound exchange capabilities.
Germany Requests Its Gold Back – A Slow Start
In January 2013, Germany made a gold repatriation request to United States Federal Reserve in New York and Banque de France in Paris regarding a portion of the gold they held on deposit at those entities. At the time, Germany cited the potential of a currency crisis and the need to have its gold close by.
Germany requested repatriation of a total of 674 tons of gold from the New York Fed and the Banque de France. The Fed notified Germany their gold would be delivered over a period of eight years, raising eyebrows as to why it would take so long to make the requested repatriation.
In January 2014, it was reported that just 37 tons of gold had been returned to Germany, with 32 tons coming from Paris and just five tons from New York.
The Pace Picks Up
In January 2015, however, the German central bank the Bundesbank announced that it had received 120 tons of gold in 2014; 35 tons from Paris and 85 tons from New York.
In March of 2015, Henner Asche, deputy head of markets for the Bundesbank noted that 67 tons of gold had been transferred from Paris to Frankfurt and 90 tons from New York to Frankfort, reflecting an increase in the amounts reported at year end 2014 and bringing the total received to 157 tons.
Herr Asche also reported that 1,447 tons of the Bundesbank’s gold were held in New York, 438 tons in London and 307 tons in Paris.
On January 27, 2016, the Bundesbank announced that in 2015 210 tonnes of gold were transferred to Frankfurt from Paris (110 tonnes) and New York (about 100 tonnes).
“With approximately 1,403 tonnes of gold, Frankfurt has been our largest storage location, ahead of New York, since the end of last year,” said Carl-Ludwig Thiele, Member of the Executive Board of the Deutsche Bundesbank.
Germany Kicks off a Repatriation Craze
Germany’s request in January 2013 to have its gold repatriated set off a slew of interest in gold repatriation from other central banks including those in the Netherlands, Belgium and Austria. Gold repatriation requests have continued to drain the New York Federal Reserve’s gold vault.
U.S. Federal Reserve Gold Holdings
The charts below (click to enlarge) by Nick Laird of Sharelynx show the most current Federal Reserve gold holdings.
The Fed’s gold holdings have declined steadily since the early 1960’s.
In January 2015 19.891 tons of gold left the NY Fed and another 9.5571 tons were shipped out the door in February.
U.S. Federal Reserve Gold Held on Behalf of Other Nations
As countries repatriate their gold, the Fed’s vaults get emptier.
In March 2015, the NY Fed shipped out more than ten tons of gold.
Another ten tons of gold left the NY Fed in March. Nearly 200 tons of gold have been removed over the past twleve months.
*For a list of the top twenty gold holding nations and commentary click here.
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