Gold Investing: Germany’s Bundesbank Releases Gold Reserve Details

Gold InvestingBundesbank to Conspiracy Theorists: Here Are Our Gold Reserves

For those wondering how much gold Germany has and where it keeps it all, the country’s central bank just provided an official answer: in a whopping 2,300-page publication, the Bundesbank provides a detailed list of every single gold bar in its nearly 3,400-ton reserve. At today’s gold price, Germany’s gold reserves are worth approximately US$125 billion. According to the publication, a little more than a third of Germany’s gold reserves is stored at the Bundesbank in Frankfurt, with the rest being stored at the U.S. Federal Reserve, in England, and in France. (Source: “The Deutsche Bundesbank’s Gold Holdings,” Bundesbank web site, last accessed October 10, 2015.)

Why did the Bundesbank publish such a detailed list of its gold? Well, the German central bank has been under criticism for not being transparent enough about its massive gold reserves.

In 2012, the German Federal Court of Auditors asked the central bank to physically take stock of its gold holdings outside the country. However, the Bundesbank decided not to follow the auditors’ request, saying that there were “no doubts about the integrity, reputation and safety of these foreign depositories.”

This kind of response turned out to be not so convincing. Instead, people began to speculate over the safety of Germany’s offshore gold reserves. There were doubts that some of the gold stored overseas might not actually be there. The Bild-Zeitung newspaper even started a campaign called “Bring Our Gold Back Home.” This time, the Bundesbank listened. In 2013, the bank announced that it planned to bring home some of its gold being stored in the U.S. and France. According to the German central bank, half of Germany’s gold reserves will be stored in Germany by 2020.


Central Banks: Buying Gold and Showing It

It has long been the case that smaller countries with economic problems are hoarding gold to give their central banks credibility. Recently, however, even the bigger countries are putting gold on their shopping lists. For instance, Russia’s central bank had 841.1 tonnes of gold in October 2011, making up nine percent of its reserves; by October 2015, the Russian central bank had 1,317.7 tonnes of gold. That’s a 56.7% increase in four years! (Source: “Latest World Official Gold Reserves,” World Gold Council web site, last accessed October 13, 2015.)

Recently, China decided to show its gold, too. In July, China’s central bank announced that it had increased its gold reserves by a whopping 57% to 1,658 tons. With 604 tons of gold being added to the country’s vaults, China has surpassed Russia to become the country with the fifth-largest amount of gold reserves.

Despite the criticism it received, the Bundesbank is in decent shape compared to most; with 3,381 tonnes of gold, Germany is the country with the second-largest amount of gold reserves, trailing only behind the United States. From now on, the Bundesbank plans to publish its gold bar list once a year on its web site and list its gold holdings, broken down by custodian, as of the end of the preceding calendar year.

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