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Bring in the Bullion: Germany Repatriates Gold From U.S. and France

January 16, 2013 - The Bundesbank, the central bank in Germany, is set to reclaim some of its large gold reserves which are currently held in Paris and New York. A move to audit German gold held overseas moved through German Federal Courts last year, provoking a demand that the gold be accounted for. Central banks typically hold some reserves of gold bullion in foreign central banks as a means of convenience in the backing of their currencies.

The Bundesbank has announced plans to withdraw the entire 450-ton store of gold bullion from the Bank of France in Paris and portion of the 1,500 tons of gold currently held by the New York Federal Reserve.

Germany boasts the world’s second-largest bullion reserves at 270,000 gold bars valued at $177.5 billion, an amount second only to the U.S.

The German government will present a new plan for the management of its gold reserves on Wednesday, and has refrained from commenting on the reports ahead of the announcement.

RT reports the German stockpile was relocated abroad during the Cold War amid fears of a possible Soviet invasion. Only about 30 percent of Germany’s gold reserves are currently being held in the country at the facilities of the Frankfurt-based Bundesbank.

The German Court of Auditors issued a damning report that criticized the management of the Bundesbank’s foreign bullion stockpiles. The decision to repatriate was made by the Bundesbank, which was taken aback by the criticism as it is widely regarded as one of the most trustworthy institutions of German society.

The Bundesbank has said that the repatriation is not because it expects a worldwide crisis or because it wants to become more active in the gold market. Forbes reports that no matter what the Bundesbank officials say, the move is obviously because it has less confidence in the precious metal being stored outside of German borders.

Forbes also reports that it is interesting so many investment advisors and experts do not advocate individual investors holding much physical gold as an investment asset, though the physical ownership of gold is clearly an issue for the German central bank which is embroiled in the debt concerns of the most beleaguered Western nation, Greece. Additionally, the central banks of the world hold massive amounts of gold and most of them are currently in an accumulation phase.


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Jonathan Monroe

Senior Staff Writer -

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