How safe is German gold in New York?

2025-05-04 09:23:00, Kosova & Bota CNA

Almost half of Germany's gold reserves are still stored in New York and London. Why is that? And why doesn't the Bundesbank bring German gold home?

In times of cooling relations between Washington and Berlin, it may come as a surprise that more than a third of Germany's gold reserves are still held by the US Federal Reserve. There have been increasing calls recently for these reserves to be returned to Germany. "Bring our gold home," Michael Jäger, president of the European Taxpayers' Association, demanded on ZDF. Such demands have gained momentum following US President Donald Trump's repeated attacks on Federal Reserve Chairman Jerome Powell, with which he openly questions the independence of the US central banking system.

Indeed, Germany's gold reserves abroad have long been a controversial issue and are surrounded by a number of myths. The Deutsche Bundesbank has also played a role here. Until 2013, it published the total amount of reserves every year, but was largely silent about how these reserves were distributed internationally. Now, nothing has changed fundamentally: since then, the Federal Bank has strived for transparency.

How safe is German gold in New York?

How big are Germany's gold reserves?

Germany has the second-largest gold reserves in the world after the United States. At the end of 2024, according to the Bundesbank's annual report, they stood at 3,352 tons, corresponding to a record value of 270.58 billion euros. Of these, 1,710 tons, or about 51 percent, are stored in an undisclosed location in Frankfurt am Main. If we take into account the strong rise in the price of gold for a good quarter so far this year, the net value of the German gold market currently corresponds to around 340 billion euros.

How much German gold is still stored abroad?

1,236 tons of gold, or almost 37 percent of Germany's reserves, are stored in the vaults of the Federal Reserve Bank in New York. The remaining 409 tons, roughly 12.2 percent, are held by the Bank of England in London. Between 2013 and 2017, the Bundesbank reduced its holdings abroad. A total of 300 tons were moved from New York to Germany. The 374 tons previously stored in Paris were transferred in full. At the time, the Bundesbank justified its new storage concept with the changed geopolitical situation and the freed up vault capacity in Germany.

Is a further transfer of stocks planned?

There are currently no concrete plans for this. However, the Bundesbank refers to its depository concept, according to which: "The main factors for the storage of gold reserves are, above all, the objectives of security and marketability, so that the gold can be sold or exchanged for foreign currencies if necessary. The Deutsche Bundesbank regularly evaluates the depositors of its gold reserves based on these criteria," explains a spokesman. The cost-effectiveness of storage also plays a role. "The New York Fed is and remains an important depository for our gold in this context," said a Bundesbank spokesman. "We have no doubt that with the New York Fed we have a reliable and trustworthy partner for the storage of our gold reserves."

Why is German gold stored abroad?

The reasons lie in the post-World War II world economic order. After the Reichsbank's gold was confiscated by the Allies, the gold reserves of the new Federal Republic were zero. The Federal Republic's gold reserves were not sent to the USA, England or France, but were partly credited to Germany as payments for the high balance sheet surpluses from 1951. This was stipulated at the time by the rules of the then European Payments Union (EPU) and the Bretton Woods international monetary system. However, this gold was not sent to Germany, but mostly remained in the main gold trading centers in the USA, Great Britain and France.

As of 2013, 69 percent of Germany's gold reserves were stored abroad. Security considerations also played a role. During the Cold War, the Soviet Union's sphere of influence extended right up to the border of the Federal Republic of Germany, so it made sense to leave the reserves in storage locations further west.

How safe is German gold in New York?

How are reserves controlled?

While reserves in New York and London can be liquidated more quickly, the question arises as to how Germany can effectively control its reserves abroad. To this end, the Bundesbank sends inspection teams to New York and London "at regular intervals." These inspectors examine a pre-selected sample of gold bars that the foreign central bank physically presents to them. The bar data and purity are compared with German data. "Furthermore, the gold bars are weighed on site and checked for authenticity using our testing equipment," explains a Bundesbank spokesman. "At no point during these inspections were there any obstacles or restrictions on the part of the depository institutions, the New York Fed or the Bank of England."

In any case, access from the US or the UK is hard to imagine. "According to the principles of international law, foreign exchange reserves are protected from interference by the enforcement authorities of the host country," the Bundesbank explains. The Bundesbank publishes the exact holdings every year in its gold bar list, which lists every gold bar on a total of 2,373 pages./ DW