Germany and Italy to withdraw billions in gold from US due to Trump's policy - FT

Although New York remains, perhaps, the most important gold trading center in the world, Germany and Italy are currently pressing for the return of $245 billion in gold from the U.S. European countries are concerned about U.S. President Donald Trump's interference in the independence of the Federal Reserve Bank.

Reported by UNN with reference to Financial Times.

Details

A survey of over 70 global central banks this week showed that an increasing number of them are considering storing their gold domestically. The key reasons are fears about the ability to access bullion in a crisis.

Currently, Germany and Italy are facing calls to withdraw their gold from New York. Factors such as President Donald Trump's calls, his plans and thoughts in the context of the Federal Reserve System's activities, and increasing geopolitical turbulence.

All of the above influences and creates "strong arguments" for moving more gold to Europe or Germany "in turbulent times," the FT writes.

Reference

According to the World Gold Council, Germany and Italy rank second and third globally in terms of national gold reserves after the U.S. – 3,352 tons and 2,452 tons, respectively.

Both countries largely rely on the Federal Reserve Bank of New York in Manhattan as a custodian, each holding more than a third of its bullion in the U.S. The FT estimates the combined market value of gold held in the U.S. to be over $245 billion.

Comment

Peter Gauweiler, a prominent former conservative lawmaker from the Bavarian Christian Social Union, emphasized that the Bundesbank "must not take any simplified paths" when it comes to protecting the country's gold reserves.

We need to consider whether storing gold abroad has become safer and more stable over the past decade, or not.

He added that "the answer to this question is self-evident," and noted that geopolitical risk has made the world more dangerous.

The Taxpayers Association of Europe sent letters to the finance ministries and central banks of Germany and Italy, urging politicians to reconsider their reliance on the Fed as the custodian of their gold.

"We are very concerned about Trump's interference in the independence of the Federal Reserve Bank," Michael Jaeger, president of TAE, told the FT.

In Germany, a grassroots campaign for "repatriation of our gold" since 2010 has changed the Bundesbank's policy. In 2013, the German central bank decided to keep half of its reserves at home, moving 674 tons of bullion from Paris and New York to its headquarters in Frankfurt in a high-security operation that cost 7 million euros. Currently, 37 percent of the Bundesbank's gold reserves are held in New York.

In 2019, in Italy, Meloni's far-right party "Brothers of Italy," while still in opposition, lobbied for the repatriation of the country's gold reserves. Meloni promised to bring Italian gold home if her party came to power.

Fabio Rampelli, a Member of Parliament for the Brothers of Italy party, stated that the party's current position is that the "geographic location" of Italian gold has only "relative importance," given that it is under the custody of an "historical friend and ally."

Recall

Gold prices fell due to a strengthening U.S. dollar and tensions surrounding Iran in anticipation of Iran's response to U.S. airstrikes on its nuclear facilities.

Following the recent US attack on Iranian nuclear facilities, as well as subsequent threats from Iran regarding retaliatory actions, the cryptocurrency market reacted instantly. Overnight, Bitcoin fell more than 3% in 24 hours.

Earlier, UNN reported that gold prices fell by 0.5%, heading for their first weekly decline in three weeks.