German gold reserves stored in American and French vaults will be brought back to Germany, following a decision by the country’s central bank, CBS News reported today.
The Bundesbank, Germany’s central bank, is bringing back all 450 tons of gold bullion reserves stored with the Bank of France in Paris. It will also bring home an unnamed portion of the 1,500 tons of gold reserves stored in the vaults of the Federal Reserve of New York.
Since the Cold War, most of Germany's gold reserves have been stored abroad due to fears of a Soviet invasion. That particular threat ceased to exist more than two decades ago, but the country continued to leave much of its gold reserves outside of Germany.
Overall Germany's total gold bullion reserves amount to 3,400 tons and are currently worth about $200 billion in today’s market.
The price of gold bullion futures closed higher today at $1,679.21, an increase of $10.93 dollars over Monday’s close on the NY COMEX.
The Bundesbank would not comment on this report Tuesday, but on Wednesday it is scheduled to announce a new plan to manage its gold reserves. German gold reserves are comprised of 270,000 gold bars, the second-largest stockpile in the world behind the U.S. reserves.
As of today, slightly less than half of these reserves are locked away in New York, with a bit more than 10 percent in both Paris and London. The rest of the gold reserves, a third of Germany’s total, have been kept in the Bundesbank's vault in Frankfurt.
The redistribution of the reserves comes after a 2012 report in which the independent Federal Auditors' Office of Germany announced that the country’s central bank was not properly supervising its overseas gold reserves. The German people, accustomed to regarding the Bundesbank among the most trusted institutions in the land, balked. The central bank issued a quote saying, "there is no doubt about the integrity of the foreign storage sites." But the issue was not resolved.
However, debates continued and many speculated that the gold had been sold or leased out, never to be seen again. Politicians called for the reserves, most of which were in vaults, to be repatriated.