Seeking to consolidate its gold holdings within its borders, Germany says it will be removing 674 tons of gold from vaults in the United States and France in the coming years.
With a gold reserve of about $183 billion, two-thirds of it held in other nations, Germany's Bundesbank announced on Wednesday that its intentions to repatriate the gold is part of an effort to consolidate over 50 percent of its reserves within its own vaults by 2020.
In total, 300 million tons will be removed from Federal Reserve vaults in lower Manhattan, while 374 million tons will be taken from France's Banque de France in Paris.
During the Cold War, Germany relocated much of its gold holdings as far as west as it could, in case Western Germany was invaded by the Soviet Union. Germany presently has the second largest holdings of gold after the United States. According to a 2005 audit of the Federal Reserve, the U.S. has approximately 8,134 tons of gold.
Bundesbank member Carl-Ludwig Thiele refused to say how the transfers would take place or how much it would cost, citing security concerns, according to the New York Times
A spokesman for the New York Fed also declined to comment about the transfer.
Currently, Germany's gold reserves are stored by the New York Fed at no cost, under the theory that the presence of foreign gold is beneficial to the dollar and its status as the global reserve currency.
Bundesbank officials were quick to note that their decision to repatriate the gold did not stem from any misgivings about the trustworthiness of the reserves' host nations.
Despite the seemingly massive move from France, the 374 tons of gold represents only 11 percent of the gold reserves Germany stores in that nation.
News of the transfer led to doubts among some financial analysts. Pimco's founder and managing director, William H. Gross, asked on Twitter: "Central banks don’t trust each other?"
"We have no doubts about the integrity of other central banks," Thiele countered in a statement. "We’re not aware of any irregularities."
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