Germany Gets Its Gold Back Faster With Job Seen Done in 2017By
Transfer of 674 tons of gold was set to be finished by 2020
Relocation of reserves from U.S. was completed in 2016
Germany’s Bundesbank is set to unite half of the country’s gold reserves in its Frankfurt vaults by the end of 2017 -- three years ahead of schedule.
The central bank transferred 216 tons of the precious metal to Frankfurt in 2016, including 111 tons from New York and 105 tons from Paris, the institution said on Thursday. That completes its planned relocation of a total of 300 tons of gold from the U.S. Federal Reserve Bank. The remaining 91 tons stored at the Bank of France will be brought over later this year, the Bundesbank said.
The project was started in 2013 with the idea to repatriate 674 tons of gold by 2020 in order to restore public confidence in the safety of Germany’s reserves and address concerns they might not exist. During the Cold War, the Bundesbank kept gold stored abroad in case of an invasion by the Soviet Union, a threat that vanished with the fall of the Iron Curtain.
Germany accumulated the majority of its reserves in the years of the gold standard in the 1950s and 1960s, when thriving exports produced large current-account surpluses that were settled in the precious metal. At the end of 2016, the Bundesbank held 3,378 tons, worth about $134 billion at current prices. That’s some 4 percent of last year’s gross domestic product.
The cost of the gold transfer has so far amounted to about 6.9 million euros ($7.4 million), with another 500,000 euros allocated to repatriate the remaining reserves. Political uncertainty associated with the new U.S. administration or the U.K.’s exit from the European Union have had no impact on the speed of the project’s completion or on decisions about storage locations, Thiele said.
“The transfers were carried out without any disruptions or irregularities,” said Carl-Ludwig Thiele, a member of the Bundesbank’s Executive Board.
The Bundesbank held 1,619 tons of its gold reserves -- 47.9 percent -- in Frankfurt at the end of last year. That share will increase to 50.6 percent at the end of 2017. Some 1,236 tons of the metal will remain at the Federal Reserve Bank in New York, and 432 tons at the Bank of England in London.