Germany, which holds the world’s second-largest national gold reserves after the United States, currently stores over 1,230 tonnes or roughly 37% of its bullion in vaults at the Federal Reserve Bank of New York. That gold is now worth approximately €164 billion (US$195 billion) amid a historic rally, with prices surging to over $5,100 an ounce. With geopolitical tremors rattling transatlantic ties, most notably the return of Donald Trump to the U.S. presidency, these reserves have suddenly become the focal point of national security and financial sovereignty debates in Berlin.
Once a product of Cold War strategy designed to safeguard West Germany’s wealth from Soviet encroachment, the policy of storing gold in allied Western nations, primarily the U.S., the U.K. (12% in London), and France, has resurfaced as a vector of vulnerability in today’s volatile political climate. What was once considered a calculated risk is now viewed by critics as untenable.
“Given the current geopolitical situation, it seems risky to store so much gold in the U.S.,” said Emanuel Mönch, former head of research at the Bundesbank, in a recent interview with German financial daily Handelsblatt. “In the interest of greater strategic independence from the U.S., the Bundesbank would therefore be well advised to consider repatriating the gold.”Mönch’s remarks come amid a flurry of concerns sparked by recent U.S. foreign policy moves. The Trump administration’s renewed pressure campaign regarding Greenland, the imposition of large-scale tariffs on the EU, and erratic economic overtures have led many in Germany to question the prudence of maintaining significant sovereign assets on American soil.
Michael Jäger, head of the European Taxpayers Association and a vocal advocate for bringing German gold home, has been particularly scathing about the current arrangement. “Trump is unpredictable and does everything to generate revenue,” he warned. “That’s why our gold is no longer safe in the Fed’s vaults.”Jäger also expressed fears that escalating tensions, including the so-called “Greenland Provocation,” in which the U.S. openly mused about annexing the semi-autonomous Danish territory, could trigger retaliatory policies and asset freezes that might restrict Germany’s access to its own gold.
Calls for repatriation were once the domain of Germany’s far-right Alternative für Deutschland (AfD), which wielded nationalist rhetoric to argue that Germany’s gold bars were “symbols of national sovereignty” and should reside within the homeland. However, the issue has recently entered mainstream discourse. Katharina Beck, the finance spokesperson for the environmentally focused, traditionally liberal Green Party, supports the move. “These reserves are an important anchor of stability and trust,” she said. “They must not become pawns in geopolitical disputes.”
Even among Chancellor Friedrich Merz’s Christian Democrats (CDU), hesitation about U.S. policy has prompted internal debate. While spokesperson Stefan Kornelius said a full withdrawal of U.S.-held gold is “not currently under consideration,” voices within the CDU itself are growing louder. CDU members Markus Ferber and Marco Wanderwitz have both raised alarms over transparency, insisting on direct inspection rights at the New York vaults and regular audits. Wanderwitz revealed that he requested an inspection of the gold in 2012 but was denied access, fuelling his long-running concerns about control and oversight. “It’s not about symbolism anymore, it’s about security and access,” he said. “There’s a difference between checking your bank balance and emptying your account.”
However, not all leading economists are convinced that repatriation is the right answer. Clemens Fuest, president of the Ifo Institute for Economic Research, warned that abrupt moves could unnecessarily inflame diplomatic tensions. “This could pour oil on the fire of the current situation,” he said, noting that Germany and the U.S. remain tightly linked in financial and security partnerships.
Joachim Nagel, president of the Bundesbank, also sought to quell concerns, stating during the International Monetary Fund’s autumn meetings in Washington last October that “there is no cause for concern.” He reaffirmed that the Federal Reserve remained “a trustworthy and reliable partner” and added: “It does not keep me awake at night.”
Still, that reassurance may not be enough in today’s charged climate. Achim Wambach, president of the Leibniz Centre for European Economic Research, added his voice to the debate, declaring that “the dependencies arising from the storage of German gold reserves abroad must now be reassessed.”
Germany has struggled with these anxieties before. In 2013, the country successfully repatriated more than 670 tonnes of gold from storage in New York and Paris. By 2020, this effort concluded with nearly all of the French-stored gold returned and around 300 tonnes withdrawn from New York.
Despite these prior efforts, the Bundesbank retained a significant portion in U.S. custody, citing logistical advantages, financial stability, and New York’s pivotal role in global financial markets. However, with tensions steadily rising and European autonomy increasingly under discussion, that decision may soon need to be revisited.
Germany is not alone in facing these dilemmas. Italy, which holds the world’s third-largest gold reserves, has also experienced political pressure to safeguard its bullion from international dependencies.
If the Bundesbank were to resume repatriation, it could trigger ripple effects across Europe, prompting other central banks to reevaluate their gold storage policies. A broader shift away from storing reserves in the U.S. could challenge the Federal Reserve’s historic role as the leading custodian of foreign gold, now holding roughly 6,300 tonnes for more than 30 nations and signal a new phase of monetary nationalism.
Ultimately, the repatriation debate cuts to the heart of a broader question: In an era of rising geopolitical fragmentation, how much autonomy and security do nations have over their monetary foundations? For Germany, with gold reserves valued at nearly €450 billion, the stakes are not just economic; they’re existential.
As Professor Ulrike Neyer of the University of Düsseldorf succinctly put it: “Due to the Trump administration, the U.S. is no longer a reliable partner.” Whether German gold returns to Frankfurt en masse or remains under Manhattan’s skyline may soon become a defining litmus test of Berlin’s evolving foreign policy and fiscal strategy. One thing is becoming abundantly clear: For many Germans, gold is no longer just a treasury asset; it’s a matter of national security.