Story of the week, some say THE STORY, began with this 14 Jan 2013 headline in the German daily Handelsblatt, “Bundesbank will deutsches Gold zurückholen“ which google translates to “Bundesbank Wants To Get Back German Gold” (apologies to our German readers, please feel free to send us the exact translation).
Bundesbank Gold vidcap
Bundesbank Wants To Get Back German Gold
Citing privy sources, Handelsblatt let out that the Bundesbank had developed a “new concept” of where to store the gold reserves of Germany. In a short video clip (click below to see but note commentary is in German), the current locations of the German gold reserves (totalling 3,396 tonnes), in order of quantities held, were identified (at the 40s mark in the video) as New York (45%), Frankfurt (31%), London (13%) and Paris (11%).
This report triggered off a frenzy in western media, including fears of a TOTAL pull-back of all German gold reserves from the US FED. See our quick report on this.
Initial fears of a total recall proved unfounded. The actual Bundesbank statement (English Version) appeared on its website on 16 Jan 2013, is produced here in full, for our more knowledgeable readers to dissect, interprete and comment:
Deutsche Bundesbank’s new storage plan for Germany’s gold reserves
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 am Main
To this end, the Bundesbank is planning a phased relocation of 300 tonnes of gold from New York to Frankfurt as well as an additional 374 tonnes from Paris to Frankfurt by 2020.
The withdrawal of the reserves from the storage location in Paris reflects the change in the framework conditions since the introduction of the euro. Given that France, like Germany, also has the euro as its national currency, the Bundesbank is no longer dependent on Paris as a financial centre in which to exchange gold for an international reserve currency should the need arise. As capacity has now become available in the Bundesbank’s own vaults in Germany, the gold stocks can now be relocated from Paris to Frankfurt.