German Economists Demand Gold Repatriation from US Vaults

Germany's Gold Dilemma: €164 Billion at Stake in US Vaults

Germany is facing a critical financial and geopolitical decision as prominent economists and politicians intensify calls to repatriate the nation's gold reserves from American vaults. With 1,236 tons of gold - worth approximately €164 billion - stored at the Federal Reserve Bank of New York, representing nearly 40% of Germany's total reserves, the debate has moved from fringe discussions to mainstream political discourse.

The Historical Context

Germany's gold accumulation in the United States dates back to the post-World War II era when the country built up substantial trade surpluses. Under the Bretton Woods system, which pegged the US dollar to gold at $35 per ounce, Germany converted its dollar surpluses into gold stored in American vaults. During the Cold War, this arrangement also served as protection against geopolitical tensions.

Germany currently holds the world's second-largest gold reserves at 3,362.4 tons, trailing only the United States with over 8,000 tons. Slightly more than half is stored domestically in Frankfurt, with the remainder distributed between the UK and the US.

The Growing Repatriation Movement

The debate has gained momentum amid concerns about US political stability under former President Donald Trump. 'Our gold is no longer safe in the Fed's vaults,' warns Michael Jäger, chairman of the Taxpayers Association of Europe and the Association of German Taxpayers. 'Trump is unpredictable and will do anything to generate revenue. What happens if the provocation around Greenland escalates? The risk exists that the Deutsche Bundesbank will no longer have access to its gold.'

Emanuel Mönch, a prominent economist, argues in the financial newspaper Handelsblatt that it has become 'too risky' to leave gold reserves in America under the current administration. 'In the interest of greater strategic independence from the United States, the Bundesbank would do well to consider bringing the gold back.'

Marie-Agnes Strack-Zimmermann, a European Parliament member for the FDP, has urged the German government to develop a clear plan for complete repatriation. 'I urge the German government to make a clear plan for the complete repatriation of reserves to Germany,' she told Der Spiegel.

Previous Repatriation and Current Opposition

Germany has precedent for such operations. Between 2013 and 2017, the country repatriated 300 tons of gold from the United States and 374 tons from France. Michael Hüther, head of the German Economic Institute, believes the logistics wouldn't be overly complicated.

However, significant opposition remains. Bundesbank President Joachim Nagel emphasized during an International Monetary Fund meeting in October that there was 'no reason for concern' about the gold in America. The German government spokesperson recently reiterated that repatriation is not currently being considered.

Economist Clemens Fuest of the ifo Institute warns of potential escalation: 'It might just pour oil on the fire,' he cautions, emphasizing that timing is crucial. 'This must happen when there is no acute conflict.'

Broader Implications

The debate reflects broader global trends toward financial sovereignty and reduced reliance on US dominance. According to a 2025 OMFIF survey, 70% of central banks say US instability discourages dollar holdings, up from 37% the previous year.

Stefan Ribe, strategist at investment firm Acatis Investment, questions whether traditional rules still apply: 'If you look at what's happening in Greenland, you have to wonder whether the old rules still apply under the Trump administration.'

For now, the German government maintains that its gold reserves are appropriately diversified, with half already stored domestically in Frankfurt. But as geopolitical tensions continue to evolve, the pressure to bring Germany's gold home may become increasingly difficult to resist.