Berlin is facing renewed calls to repatriate a significant portion of its gold reserves held in the United States, a move fueled by growing concerns over geopolitical risk and diminishing trust in Washington. The debate, long simmering beneath the surface of transatlantic financial relations, has resurfaced with increased intensity following the unpredictable policy shifts of the current US administration.
Germany holds the world’s second-largest national gold reserves, trailing only the United States. Approximately €164 billion (£142 billion) – equivalent to 1,236 tonnes – is currently stored in vaults in New York, primarily held at the Federal Reserve. This substantial holding represents a significant portion of Germany’s overall gold reserves and has prompted anxieties about its security and accessibility.
The renewed push for repatriation is being led by prominent economists and political figures who argue that maintaining such a large volume of gold in a foreign country, particularly under an administration perceived as increasingly unpredictable, poses an unacceptable risk to Germany’s strategic independence. Emanuel Mönch, a leading economist and former head of research at the Bundesbank, Germany’s federal bank, has publicly advocated for bringing the gold home. Given the current geopolitical situation, it seems risky to store so much gold in the US,
Mönch told the financial newspaper Handelsblatt. In the interest of greater strategic independence from the US, the Bundesbank would therefore be well advised to consider repatriating the gold.
The concerns are not solely economic. The shift in transatlantic relations, marked by policy disagreements and a perceived erosion of traditional alliances, has heightened anxieties about the potential for political interference or even the outright seizure of assets. Michael Jäger, head of the European Taxpayers Association, voiced these fears directly, stating that Donald Trump’s unpredictable
nature meant that our gold is no longer safe in the Fed’s vaults.
This sentiment reflects a broader unease within European financial circles regarding the reliability of the US as a safe haven for national assets.
The idea of repatriating gold reserves is not new. Following the 2008 financial crisis, Germany initiated a program to gradually bring its gold back from various locations, including the United States and the United Kingdom. However, the pace of repatriation has been slow, and a substantial amount remains overseas. The current debate centers on accelerating this process and prioritizing the withdrawal of gold from the US, given the perceived increase in risk.
While the calls for repatriation are gaining momentum, the German government has so far been hesitant to commit to a significant shift in policy. Stefan Kornelius, the spokesperson for Friedrich Merz’s coalition government, recently stated that withdrawal of the gold reserves was not currently under consideration. This cautious approach likely reflects a desire to avoid escalating tensions with the United States and potentially disrupting financial markets.
However, the economic arguments supporting repatriation are becoming increasingly compelling. Experts point to the declining supply of gold reserves globally. According to recent analysis, gold reserves in the ground have declined 40 percent since 2012,
making it more difficult to increase supply to meet rising demand and potentially driving up prices. Some analysts predict that gold prices could reach US $7,000 per ounce in 2026, further incentivizing nations to secure their existing holdings.
The debate also touches upon broader questions of national sovereignty and financial independence. Holding a significant portion of national wealth in a foreign country inherently creates a degree of vulnerability. Repatriating gold reserves would not only reduce this vulnerability but also strengthen Germany’s position as a major financial power.
The situation is further complicated by transparency concerns surrounding the storage of gold reserves. While the Federal Reserve maintains that it accurately accounts for all gold held in its vaults, skepticism persists regarding the true extent of US gold reserves and the possibility of undisclosed transactions. This lack of transparency adds to the anxieties driving the repatriation movement.
The potential consequences of a large-scale repatriation of German gold from the US are significant. It could put downward pressure on the US dollar, increase demand for gold, and potentially trigger a broader reassessment of gold storage practices among other nations. It could also strain relations between Germany and the United States, although officials on both sides have sought to downplay the issue publicly.
The discussion in Germany is part of a wider global trend of nations re-evaluating their reliance on the US dollar and seeking greater financial autonomy. The increasing geopolitical instability and the rise of alternative economic powers are driving this trend, prompting countries to diversify their reserves and reduce their dependence on a single currency or financial center. The question of where to safely store national wealth is becoming increasingly urgent as the global landscape shifts.
For now, the German government remains circumspect, weighing the risks and benefits of repatriation. However, the growing chorus of voices calling for action, coupled with the increasingly precarious geopolitical environment, suggests that the issue will remain a prominent topic of debate in Berlin for the foreseeable future. The security of Germany’s gold reserves, and the broader implications for transatlantic financial relations, are likely to remain under intense scrutiny.
