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Germany: Gold Reserves Moving to Frankfurt Ahead of Schedule

Image: Germany: Gold Reserves Moving to Frankfurt Ahead of Schedule

The oldest gold bar of the German Bundesbank from the year 1917 with a value of 442,000 Euros, ($472,700), bottom, and a bar from 2014 with the same value are displayed in the bank's headquarters in Frankfurt, Germany, on Thursday, Feb. 9, 2017. (AP Photo/Michael Probst)

By    |   Friday, 10 Feb 2017 02:01 PM

Germany is set to have more than 50 percent of its gold reserves at vaults in Frankfurt by the end of this year, putting the country's central bank, Bundesbank, ahead of schedule in its effort to repatriate gold reserves from the United States and France.

The project, which initially set out to transfer 675 tons of gold reserves to Frankfurt launched in 2013 with the aim of restoring the country’s “trust and confidence” in the safety and security of its gold reserves, Bloomberg reported.

At the time, Bundesbank planned to complete the relocation by 2020.

The central bank relocated 111 tons of gold from New York In 2016, completing its transfer of about 300 tons of gold from the U.S. Federal Reserve Bank, Bloomberg reported. The final transfer — 91 tons from Bank of France — is expected to be completed later this year.

During the Cold War, Germany kept gold reserves in other countries to guard against Soviet invasion, CNN Money noted. But fears began to circulate among some in Germany about the security of those foreign reserves. Despite giving reassurances that the gold was safe, Bundesbank announced its plans to bring some of its reserves to Frankfurt.

Thus far, the transfers have cost about $7.4 million, Bloomberg reported.

“These transfers were carried out without any disruptions or irregularities,” said Carl-Ludwig Thiele, a Bundesbank Executive Board member, according to Bloomberg

By the end of last year, the Bundesbank had nearly 3,400 tons of reserves valued at more than $130 billion, according to Bloomberg. The Federal Reserve Bank in New York will maintain 1,236 tons of Germany's gold reserves and Bank of England in London will have 432 tons.

Today, gold has seemed to lose its importance in an economy where money is dealt with from a digital standpoint, according to The New York Times. But gold maintains an influence.

“From a scientific point of view you could say it’s no longer necessary,” Jorg Kramer, chief economist at Commerzbank in Frankfurt, said according to The New York Times. “However, credibility is very important. Gold is perceived as trustworthy. Therefore it still plays a role.”

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Germany is set to have more than 50 percent of its gold reserves at vaults in Frankfurt by the end of this year, putting the country's central bank, Bundesbank, ahead of schedule in its effort to repatriate gold reserves from the United States and France.
germany, gold, reserves, frankfurt
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2017-01-10
Friday, 10 Feb 2017 02:01 PM
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