Under the shadow of Trump, is Germany's overseas gold reserve still safe?

Due to concerns over U.S. President Trump's unpredictable tariff policies, German politicians are questioning the safety of the €85 billion gold reserves stored at the New York Federal Reserve.

The conflicts between Trump and long-time European allies over trade and security issues, as well as his attacks on the Federal Reserve, have brought this issue back into focus in recent weeks. Stefan Keuter, a member of the far-right German party Alternative for Germany (AfD), has publicly called for Germany to repatriate its gold reserves stored in the U.S.:

The U.S. may use these gold reserves as a tool for extortion; Germany's gold reserves should be fully repatriated immediately.

The German Taxpayers' Association sent a letter this week to the central bank and the Ministry of Finance, explicitly demanding the repatriation of gold reserves in the U.S. The association's vice president, Michael Jaeger, stated:

Trump's attempt to control the Federal Reserve means he could potentially control Germany's gold in the U.S.—this is our money and must be repatriated.

According to publicly available data from the German central bank, it holds 3,352 tons of gold reserves, second only to the U.S., making it the second-largest gold reserve holder in the world. Approximately 36%, equivalent to 1,222 tons and valued at about €85 billion ($92.1 billion), is currently stored in the vault of the Federal Reserve Bank of New York in Manhattan.

The large amount of gold stored in New York dates back to the Cold War era. At that time, concerns over the threat of a Soviet invasion made it a security measure for Germany to place its gold across the Atlantic.

This gold also reinforced the military alliance between Germany and the U.S., which still has dozens of military bases across Germany, including the largest military base in Europe.

However, with changing geopolitical dynamics, Germany initiated a plan to repatriate part of its gold reserves in 2013. By 2017, Germany had transferred 642 tons of gold stored in New York and Paris back to Frankfurt, but still retains a significant amount in the U.S.

Currently, Germany's gold reserves are stored at the headquarters of the German central bank in Frankfurt, as well as at the Bank of England in New York and London.

The German central bank is facing a dilemma. On one hand, repatriating the gold could be seen as a sign of distrust towards the U.S.; on the other hand, Trump's statements have indeed raised reasonable concerns about the safety of these reserves.

Although the official stance of the German central bank is that the current distribution of reserves is "reasonable and validated," it has begun to assess potential risks and response strategies internally.

We are closely monitoring the situation, but any decisions will be based on long-term strategic considerations rather than short-term political rhetoric.

Market observers note that global central bank gold purchases have continued to rise, reaching nearly 1,100 tons in 2023, a historic high, reflecting that central banks are seeking to reduce their dependence on the U.S. dollar