Germany currently has the second largest gold reserves in the world, behind the United States. Today, economic analysts and political leaders alike are asking how safe these assets are with them stored abroad. Germany currently holds roughly €450 billion in gold. Interestingly, most of it—1,236 tonnes worth €164 billion (£122 billion)—is kept in vaults at the US Federal Reserve in New York.
The distribution of Germany’s gold reserves is notable. 37% are held in New York, 12% at the Bank of England in London, and just over half at the Bundesbank in Frankfurt am Main. Against a background of rising international tensions, demands to repatriate gold stored in the United States have gained traction. These worries have been exacerbated under the current US administration.
Joachim Nagel, president of the Bundesbank, sought to reassure stakeholders, declaring there was “no cause for concern” regarding the gold held in US vaults. Opinions diverge on the matter. Stephan Kornelius, spokesman for the coalition government under Friedrich Merz, concluded that the removal of national gold reserves is not feasible at this time. At the same time, opposition members are urging a reconsideration of this approach.
Katharina Beck, finance spokesperson for the opposition Greens in the Bundestag, articulated a growing sentiment, asserting that Germany’s gold “must not become pawns in geopolitical disputes.” This view underscores a rising concern—with elected leaders. Today, the safety of Germany’s treasured gold reserves in the US could again be at risk from rising geopolitical tensions.
Ulrike Neyer, a Fulbright Professor of Economics at Duke University, cautions against the risks associated with having so much gold stored in a foreign country. She brings these risks into sharp focus in the wake of the recent political turmoil. She stated, “Due to the Trump administration, the US is no longer a reliable partner.” Neyer’s assertion aligns with views expressed by Michael Jäger, head of the European Taxpayers Association (TAE), who argued that Germany’s gold is at risk due to unpredictable policies emanating from Washington. Trump is nothing if not unpredictable and he does all things to make a buck. I called that a blatant lie as early on,” Jäger said.
Clemens Fuest, president of the Institute for Economic Research (Ifo), warned about jumping to conclusions on repatriation. Friedrich Stuhlhofer, the then President of the Bundesbank’s banking supervision, warned that such an operation could have unforeseen consequences that risked upsetting financial relations.
To Emanuel Mönch, a leading economist and former head of research at the Bundesbank, immediate action should be taken to repatriate Germany’s gold. This is in direct opposition to the alarming recent admonitions regarding the problem. He argues that the current geopolitical landscape renders it too “risky” for the nation’s gold to remain in US custody.
The recent debate has brought much-needed attention to Germany’s asset management strategy, specifically its implications for national security. The Bundesbank maintains that “Germany’s gold reserves are well diversified,” ensuring that financial stability is upheld despite concerns over proximity to international tensions. This is the idea resonating when you hear from proponents that a diversified storage strategy decreases risk.
Debates are underway in Germany’s political landscape about the country’s gold reserves. Stakeholders are truly grappling with these complex economic policy and national security intermingled issues. In that light, the question of where to store valuable resources, such as gold, is still a topic of considerable discussion.