Tags: Germany | gold | audit | reserves

The Germans Are Coming to Count Their Gold

By John Morgan   |   Thursday, 25 Oct 2012 01:50 PM

Germany withdrew most of its gold holdings from the Bank of England vaults shortly after the launch of the euro, and now German government auditors want proof that its remaining international holdings of the precious metal even exist.

The Telegraph reported the German audit agency wants on-site inspections of the country’s remaining gold reserves in London, Paris and New York.

Germany is believed to have 3,396 tons of gold, the world’s second-largest holdings after the United States. Nearly all of it was shifted abroad during the Cold War as a precaution against a Soviet invasion that never occurred.

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The German Court of Auditors told legislators that the gold in the various international locations has “never been physically verified.” It ordered the Bundesbank to secure access to the storage sites, the Telegraph said.

In light of the eurozone economic crisis, some German legislators want repatriation of all gold stored outside of the country. “All the gold must come home. It is precisely in this crisis that we need certainty over our gold reserves,” said Heinz-Peter Haustein of the Free Democratic Party.

The government auditors revealed the Bundesbank reduced its London holdings from 1,440 tons to 500 tons back in 2000 and 2001. The timing of the move was curious because it came at a time when the price of gold was low, the Telegraph reported. The metal was flown to Frankfurt by air freight.

Now the auditors are calling for the return of an additional 150 tons from abroad to test the quality and weight of the gold bars. Germany has no register of numbered gold bars, according to the Telegraph.

German state broadcaster Deutsche Welle commented on the development: “Questions are being raised as to whether the German Central Bank has in the past actually checked whether its gold stored in the U.S., France and the U.K. actually has the weight it is supposed to have.”

Meanwhile, CNBC reported the U.S. government conducts regularly scheduled audits of its own gold held in Fort Know, including purity tests of samples stored there.

However, much of the international gold reserves stored in the United States is believed to be held in the vault of the Federal Reserve Bank of New York. CNBC said in that underground facility, there are 122 compartments assigned to depositing countries and international organizations.

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