Germany Creates Pile of Golden Opportunities
Criminal masterminds and Hollywood scriptwriters have been put on notice. Germany's central bank is planning to shift 54,000 gold bars worth 27 billion euros from Paris and New York to its base in Frankfurt, one of the biggest publicly announced shipments of the precious metal on record.
Not to make it too easy for anyone planning a series of heists, the Bundesbank declined to say exactly how it would transport the gold, or exactly when.
But between now and 2020, all 374 tonnes of gold bars, each one weighing 12.5kg, stored at the Banque de France will have been moved – probably by truck – to their new home in the vaults below the Bundesbank's grey 1960s office block in an unfashionable corner of Frankfurt.
Simultaneously, an operation will start to repatriate 300 tonnes of Germany's 1,500 tonnes of gold on deposit at New York Federal Reserve, this time probably by airplane in small batches of 3-5 tonnes in order to be able to insure it, gold traders said.
It is the first time the Bundesbank has decided to tell the world that it is about to move lots of gold around ahead of time.
In doing so, it is following in the footsteps of some odd bedfellows, including Venezuela, Iran and Libya, who were typically trying to get ahead of possible asset seizures as a result of international sanctions.
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But this is not the biggest gold movement ever by the Bundesbank. In 2000 and 2001 it decided to bring home 940 tonnes of gold bullion from the Bank of England to save money on the storage fees that the UK central bank levies, unlike its French and US counterparts. But the Bundesbank did so at a time when its gold holdings at foreign central banks were a closely guarded secret. That transportation only came to light late last year in a leaked report by federal auditors into the Bundesbank's gold holdings.
The Bundesbank's formal reason for the latest move is that it is catching up with history. The gold was never dispatched from German soil: the country emerged after the second world war with no gold and built up reserves through trade surpluses at the foreign central banks. Keeping the gold there as a foreign currency reserve made sense, if it ever needed to be converted.
Now that Paris shares the euro there is no reason to store gold in France, Carl-Ludwig Thiele, a Bundesbank board member, said. As for New York, the bank still wants to keep a significant stock there.
Mr Thiele denied the Bundesbank, which prides itself on its fierce independence, was bowing to public pressure following an outbreak of public angst about the safety of the bullion in foreign vaults. But, he conceded, "in Germany, a lot of emotion is attached to the topic of gold reserves".