France has taken a step that once again puts the focus on a key issue in the global financial system: where the countries’ gold is kept. The Bank of France has completed the process of withdrawing its reserves stored in the United Statesthus closing a stage that went back almost a century ago. Meanwhile, in Germany the debate is growing about whether it should follow the same path, in a context marked by geopolitical uncertainty.
The French operation has not consisted of physically moving ingots from New York to Paris. Instead, the 129 tons that still remained in the New York Federal Reserve were sold in the US market and were replaced by new acquisitions in Europe. The result is clear: all French gold—some 2,437 tons—is now concentrated in national territory.
This movement puts an end to a process that began after the collapse of the Bretton Woods Agreement system, when many countries began to rethink the location of their strategic reserves.
Centralize to gain control
France’s decision responds, at least officially, to technical criteria. The governor of the central bank, François Villeroy de Galhau has insisted that there are no political motivations behind it. The objective, he maintains, is to improve asset management, unify standards and facilitate their commercialization.
Furthermore, the operation has coincided with a favorable context: the sharp rise in the price of gold has allowed accounting gains of billions of euros to emerge. Yes indeed, This benefit is relative, since the repurchase of gold has also been carried out at high priceskeeping the real value of the reserves practically intact.
France has neither reduced nor increased its gold, but something more important has changed: its direct control over it.
Germany doubts: diversification or repatriation
The contrast with Germany is evident. The Bundesbank maintains a different strategy, based on geographical diversification. Of its more than 3,300 tons of gold, a significant portion is still stored in New York and Londonas well as in Frankfurt.
The reasons are historical. During the Cold War, having reserves outside the country was considered a guarantee against possible conflicts. Furthermore, keeping gold in large financial centers facilitates its rapid sale or use in international markets.
However, that consensus is beginning to break down. The rise of the American debt, Political tensions and the new geopolitical board have reactivated doubts about security —or rather the accessibility—of that gold in the event of a crisis.
Although German authorities insist that the reserves are verified and secure, critics raise another question: what would happen if, when the time came, they could not be accessed quickly?
A debate with global implications
Full repatriation of German gold is technically possible. In fact, movements have already occurred in the past: Between 2013 and 2017, hundreds of tons were moved from abroad to German territory. But a more far-reaching decision would have much deeper consequences.
On the one hand, it could be interpreted as a sign of distrust towards the United States. On the other hand, it could generate tensions in the markets and international relations. ANDGold is not only a financial asset: it is also a symbol of stability and sovereignty.
Experts warn that, in an extreme scenario in which access to reserves abroad was limited for political reasons, the impact would be immediate: rise in the price of gold, increase in risk premiums and a blow to confidence in the global financial system.
In this context, the movement in France acts as a precedent. Germany debates. And countries like Spain, for now, watch in silence.
