(Kitco News) – In the wake of Trump’s Davos showdown with Europe over Greenland, German lawmakers and leading economists are once again calling for the country to get its billions in gold reserves out of the United States, citing the recent rupture in transatlantic relations and the risky behavior of the U.S. administration.
“Given the current geopolitical situation, it seems risky to store so much gold in the US,” leading economist and former Bundesbank head of research Emanuel Mönch told the German press on Friday. “In the interest of greater strategic independence from the US, the Bundesbank would therefore be well advised to consider repatriating the gold.”
Germany’s 3,350.25 tonnes in total sovereign gold reserves are second only to the 8,133.46 tonnes held by the U.S. – but about 37% of the German reserve – 1,236 tonnes – is stored with the Federal Reserve in New York.
Michael Jäger, the head of the European Taxpayers Association (TAE) and the Association of German Taxpayers, has also renewed his calls for Berlin to repatriate its U.S.-based reserves.
“Trump is unpredictable and he does everything to generate revenue,” Jäger told local media. “That’s why our gold is no longer safe in the Fed’s vaults.”
“What happens if the Greenland provocation continues?” Jäger speculated. “The risk is increasing that the German Bundesbank will no longer be able to access its gold. Therefore, it should repatriate its reserves.”
Katharina Beck, the finance spokesperson for the opposition Green Party in Germany’s parliament, has also called for the gold to be brought home. Beck referred to the bullion as an “important anchor of stability and trust,” and said the reserves “must not become pawns in geopolitical disputes.”
However, the ruling Christian Democratic Union party has resisted the repatriation demands. Stefan Kornelius, spokesperson for Friedrich Merz’s coalition government, said recently that the return of the country’s gold reserves was not being considered.
The head of Germany’s central bank has also attempted to assuage lawmakers’ concerns. Bundesbank president Joachim Nagel told attendees at the International Monetary Fund’s (IMF) October meetings in Washington, DC, that there was “no cause for concern” over the German gold held at the Federal Reserve.
The reelection of Donald Trump, and the aggressive and unpredictable international policies he has championed, have stoked anxiety about Germany’s reserves throughout the last year.
In April, senior figures within Germany’s newly elected Christian Democratic Union-led government, discussed repatriating the bullion over concerns that the United States is no longer a reliable partner.
“Of course, the question has arisen again,” former CDU minister Marco Wanderwitz told local media. Wanderwitz previously lobbied to personally inspect the New York gold reserves in 2012, but his request was denied. He has called for a policy that would enable German officials to regularly inspect the gold, or to return it to Germany.
Markus Ferber, a member of the European Parliament for the CDU, told Bild that he also insists on German officials being allowed to personally inspect the country’s U.S.-based bullion.
“I demand regular checks of Germany’s gold reserves,” he said. “Official representatives of the Bundesbank must personally count the bars and document their results.”
Both Ferber and Wanderwitz were already speaking to Bild about the issue of access to the reserves before President Trump imposed sweeping tariffs on the European Union in early April. But with Trump treating trade deficits as financial crimes or balances due, while also browbeating the Federal Reserve to do his bidding, the billions in gold seem more distant and less secure than ever before.
Half of Germany’s sovereign gold is held in Frankfurt, while around 30% is with the Fed in the U.S. A further 13% is stored with the Bank of England in London, with the remainder in France.
When asked by Bild reporters about the possibility of repatriating the gold in the United States, Germany’s central bank insisted that they had complete confidence in the security of their bullion.
“We have a trustworthy and reliable partner in the Fed in New York for the storage of our gold holdings,” Bundesbank President Joachim Nagel said at a press conference in February, and he repeated amidst the trade tariff fallout in April. “It does not keep me awake at night. I have complete confidence in our colleagues at the American central bank.”
But security and access are not the same thing, to say nothing of transfer. It’s the difference between checking your bank balance and emptying your account.
Beginning in 2013, the German central bank began a successful operation to repatriate a large amount of its overseas gold, which resulted in 300 tonnes from New York and about 374 tonnes from Paris being transferred to Frankfurt by 2020.
The New York Federal Reserve remains the world’s largest gold custodian, holding about 6,300 tonnes of gold on behalf of more than 30 foreign central banks.
