"Assets that serve as ballast must be held in one's own hands"! Germany and Italy are urged to withdraw gold from the United States

Against the backdrop of repeated attacks by Trump on the Federal Reserve and escalating geopolitical risks, Germany and Italy are facing calls to repatriate their gold reserves stored in the United States. The market value of the gold stored at the Federal Reserve Bank of New York exceeds $245 billion, accounting for more than one-third of each country's gold reserves.

The European Taxpayers Association has written to the finance ministries and central banks of Germany and Italy, urging policymakers to reconsider their reliance on the Federal Reserve as a gold custodian. The organization's chairman, Michael Jäger, stated:

"We are very concerned about Trump's interference with the independence of the Federal Reserve and suggest bringing the gold back home to ensure that the European Central Bank has unlimited control over the gold at all times."

Former conservative German politician Peter Gauweiler emphasized that the Federal Bank "must not take shortcuts" in protecting the national gold reserves. He pointed out that geopolitical risks over the past decade have made the world more insecure, necessitating a reassessment of the safety of overseas reserves.

A recent survey covering over 70 global central banks shows that more central banks are considering storing gold domestically, fearing they may not be able to access their gold reserves during a crisis.

Historical Burdens and Realistic Considerations

Germany and Italy hold the second and third largest national gold reserves in the world, with reserves of 3,352 tons and 2,452 tons, respectively, according to the World Gold Council. The large amounts of gold stored at the Federal Reserve Bank of New York are primarily due to historical reasons and reflect New York's status as one of the world's most important gold trading centers alongside London.

Western European countries accumulated massive gold reserves during the two decades of economic prosperity following World War II, during which they maintained significant trade surpluses with the United States. Until 1971, under the Bretton Woods fixed exchange rate system, the dollar could be exchanged for gold by the U.S. central bank. Storing precious metals across the Atlantic was also seen as a hedge against potential war threats from the Soviet Union.

France repatriated most of its overseas gold reserves to Paris in the mid-1960s, following President de Gaulle's loss of confidence in the Bretton Woods system. Germany changed its Federal Bank policy under the grassroots movement "Repatriate Our Gold," initiated in 2010.

Divergent Positions on the Political Spectrum

In Germany, the idea of "returning gold" is gaining support from both ends of the political spectrum. Former left-wing party Member of the European Parliament and current member of the left-wing populist BSW party, Fabio De Masi, stated in a media interview on the 23rd that there are "strong reasons" to move more gold back to Europe or Germany during "turbulent times."

Peter Boehringer, a precious metals expert who initiated the original movement and is now a member of the Alternative for Germany party, stated:

"Gold is the last lifeline asset for central banks, and therefore needs to be stored without any third-party risk."

He emphasized that in times of severe crisis, "it is not just legal ownership, but actual control over the gold that truly matters."

In 2013, the German central bank decided to store half of its reserves domestically, transferring 674 tons of gold from Paris and New York to its headquarters in Frankfurt through a high-security operation costing €7 million. Currently, 37% of the Federal Bank's gold reserves are still stored in New York

Italy's Policy Shift

In Italy, the Brothers of Italy party, led by Prime Minister Giorgia Meloni, lobbied for the repatriation of the national gold reserves while still in opposition in 2019. Meloni promised at the time that if her party came to power, Italy's gold would be brought back home.

However, since taking office as Prime Minister at the end of 2022, Meloni has remained silent on this issue. She hopes to maintain a friendly relationship with Trump while avoiding the threat of escalating trade wars. Fabio Rampelli, a member of the Brothers of Italy, stated that the party's current position is that, given the gold is held by "historical friends and allies," its "geographical location" is of only "relative importance."

Economic commentator Enrico Grazzini recently wrote in the Daily Fact:

"Leaving 43% of Italy's gold reserves in the U.S. under the unreliable Trump administration is very dangerous for national interests."

Bert Flossbach, co-founder of Flossbach von Storch, Germany's largest independent asset management company, expressed a similar view:

"Bringing back gold with great fanfare now would send a signal of deteriorating relations with the U.S."

The Federal Bank stated that it would "regularly assess the storage locations of gold holdings" based on guidelines established in 2013, which focus not only on security but also on liquidity, to "ensure that gold can be sold or exchanged for foreign currency when needed." The bank emphasized that the New York Federal Reserve remains an "important storage location" for German gold and added: "We have no doubt that the New York Federal Reserve is a trustworthy and reliable partner for safeguarding gold reserves."