The German central bank completed the transfer of $13 billion in gold reserves on Thursday. Germany’s gold had remained in New York for decades, spanning back to the Cold War.
The Bundesbank announced this transfer on Thursday was part of an effort to build public “trust and confidence”. Officials explained that the transfer of its gold bullion is not a response to concerns about President Trump’s monetary policy. Rather, it is an acknowledgment of the shift in political and economic climate on a broader scale, like the rising populist pressure within Germany and throughout Europe.
Carl-Ludwig Thiele, a Bundesbank board member, said at a news conference, “Trump has not triggered a discussion about the storage facility in New York,” even though the bank frequently discusses the potential effects of President Trump’s proposed policies.
Germany’s central bank began its plan to repatriate half the gold it keeps abroad in 2013. The project is slated to be finished three years ahead of schedule, with the final transfer expected from Paris later this year.
Germany’s gold reserves are the second-largest stockpile of precious metal in the world. Valued at 120 billion-euro ($127 billion), the reserve has been the subject of recent conspiracy theories. Around 2012, theories began to surface that cast doubt on whether or not Germany still had the reserves it claimed. The “Bring Our Gold Back Home” campaign lead by German tabloid Bild-Zeitung also surfaced at the same time, fueling the anxiety that the euro crisis could result in the loss of German gold reserves.
The German government initially cultivated the gold reserves after World War II in order to protect economic prosperity. However, up to 98% of the reserves were stored abroad during the Cold War to keep them safe in the event of an invasion by the Soviet Union. They were kept near foreign exchange points in London, New York, and Paris–in case of an emergency requiring foreign currency.
Now, however, the Soviet Union no longer poses a threat, and the need for French currency is obsolete since France and Germany are both part of the eurozone. In light of candidates like France’s Marine Le Pen and movements like Italy’s 5-Star, which openly advocate withdrawing from the eurozone, some suggest that the gold flowing back to Germany will be needed to back a new German currency if the euro collapses.
For the time being, however, Germany is following through with its plan to keep half of its gold reserves in London and New York with no plans for removal, according to Mr. Thiele.