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“America is no longer predictable” - Is German gold still safe in the US?

2026-01-30 19:05:54Biznes SHKRUAR NGA REDAKSIA VOX
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Germany has the second largest gold reserves in the world. Most of them are stored in the US. Could it become a problem because of Donald Trump?

In times of crisis, many invest in gold. Both central banks and governments hold gold as reserves. Germany, for example, has the second largest gold reserves in the world, with a total of about 3,550 tons. These are data from the German Central Bank (Deutsche Bundesbank) for the end of 2024.

Of this, 1,710 tons are stored in Frankfurt. The rest is located abroad. Specifically: 405 tons at the Bank of England in London and 1,236 tons at the Federal Reserve Bank (Fed) in New York. This means that more than a third of Germany's gold reserves, 37 percent to be exact, are located in the US.

Trump puts pressure on the Central Bank

Gold has been considered safe there for years, among other reasons, because central banks are generally independent and there is great mutual trust between them. But US President Donald Trump is trying to change that. In recent months, he has increasingly launched attacks aimed at undermining the independence of the Fed, i.e. the US central banks. He recently threatened to fire Federal Reserve Chairman Jerome Powell over the renovation of the Federal Reserve buildings. Powell himself sees this as just an excuse to exert pressure.

Trump has already tried to remove Federal Reserve Chair Lisa Cook. The case is currently before the Supreme Court. For months, Trump has been pressuring Federal Reserve Chairman Powell to cut key interest rates more quickly and broadly. All of this is often accompanied by offensive posts on his Truth Social platform.

“The more political pressure central banks are exposed to – and that’s what we’re seeing now in the US – the harder it is to maintain this foundation of trust,” says gold expert Wolfgang Wrzesniok-Roßbach of Fragold in Frankfurt. “We need to watch closely how Trump will continue to treat the Federal Reserve and how independent it will be in the future,” he adds.

"America is no longer predictable"

Storing gold in the US could thus become a potential problem for Germany. So should we be afraid for the safety of these gold reserves? “The gold reserves are currently safe in the US. But tomorrow the US government could suddenly say: 'We are holding gold reserves as collateral,'” says Wrzesniok-Roßbach.

The risk factor with Donald Trump is high. “The US is not a reliable partner for the EU at the moment,” Achim Wambach, president of the Center for European Economic Research (ZEW), told Reuters.

Under the Trump administration, German gold is no longer safe in the US, according to Stefan Riße, capital markets strategist at ACATIS Investment. “Under Donald Trump, America is no longer predictable. We simply see that he has Europe, and especially Germany, at his mercy.”

There is no credibility, says Riße: “If we look at what is happening in Greenland, we have to ask ourselves whether the old rules still apply to the Trump administration.”

Should gold be returned to Germany?

More and more experts are supporting the return of gold from New York to Germany. This would make it more independent and flexible. “The opportunities and risks certainly favor the relocation of gold reserves to Germany,” says Riße.

If the gold were in Germany, there would actually be no risk. As long as it is in the US, there is a risk. Until now, this risk was considered so small that the effort to bring the gold back to Germany seemed too great.

"Under Donald Trump, we need to look at it differently and reassess the risks," he says.

According to many experts, it is also important to wait for the right moment. However, in the current situation, the President of the Ifo Institute, Clemens Fuest, warns against hasty actions to bring Germany's gold reserves from the United States.

“America is no longer predictable” - Is German gold still safe in
The Fort Knox building where the gold reserves are located

“In the current situation, this would only add fuel to the fire and we should refrain from this,” Fuest said. “This should be done in a situation where there is no acute conflict situation.”

Why is gold abroad?

The reason why gold is stored abroad is largely historical. "The reserves were not taken abroad. That is often thought and then people talk about bringing them back. In reality, they were never here," said gold expert Wrzesniok-Roßbach.

After World War II, Germany quickly built up large trade surpluses and so did foreign currencies, mainly dollars. “These foreign currencies were exchanged for gold with the help of the so-called Bretton Woods system,” says Wrzesniok-Roßbach. At the Bretton Woods conference in 1944, the dollar was declared the world’s reserve currency and its value was tied to the price of gold.

There were also security-political reasons. "At that time, people didn't want to store gold in Germany. Because there was a threat that in the event of a possible war, the gold could fall into the hands of the enemy."

Over the years, some of the gold has returned to Germany. Between 2013 and 2017, the Federal Reserve reduced its foreign reserves. A total of 300 tons were moved from New York to Germany. The 374 tons previously stored in Paris have been transferred entirely to Germany.

Bundesbank does not plan to relocate

The German Federal Bank currently sees no point in planning a return to gold. As announced, the relocation of Germany's gold reserves from the US is currently out of the question. The decision on gold reserves is based primarily on the objectives of security and marketability, so that the gold can be sold or exchanged for foreign currencies if necessary.

"Based on these criteria, the Federal Bank regularly evaluates the storage locations of its gold reserves. The New York Federal Reserve is and remains an important place for the storage of our gold within this framework," the Deutsche Bundesbank told the financial newsroom of public broadcaster ARD. The German Federal Bank therefore has no doubt that the gold is safely stored with the US Federal Reserve. /DW


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