Germany brings home $31 bn worth of gold stashed in foreign vaults during Cold War

Germany's central bank Deutsche Bundesbank today said it has completed its gold transfer process earlier than originally planned, with the transfer of 100 tonnes of gold from New York and 91 tonnes that remained in Paris after last year's transfer.

The whole of gold reserves stored in Paris has now been relocated to Frankfurt and there are no longer any German gold reserves in Paris, the central bank said.

About 50.6 per cent of Germany's gold reserves are now stored in Germany. This goal was set out by the Bundesbank in 2013 and was scheduled to be achieved by 2020 at the latest.

''This closes out the entire gold storage plan – around three years ahead of the time we were aiming for,'' Bundesbank Executive Board member Carl-Ludwig Thiele told reporters.

Under the plan unveiled in 2013, the Bundesbank would be storing half of Germany's gold reserves in its own vaults in Frankfurt am Main from 2020 onwards, requiring the phased transfer of approximately 300 tonnes of gold from New York and about 374 tonnes of gold from Paris.

Bundesbank's said the relocation of gold from storage locations abroad is running very much according to schedule. In 2015, it relocated 210 tonnes of gold reserves to Frankfurt am Main, including 110 tonnes from Paris and 100 tonnes from New York.

Since the transfers began in 2013, the Bundesbank has brought a total of 367 tonnes of gold to Frankfurt am Main – 177 tonnes from Paris and 190 tonnes from New York. This is equivalent to roughly 54.5 per cent of the total quantity to be transferred (as at 31 December 2015).

In total, 743 tonnes have been transferred. The project was completed three years ahead of schedule.

The central bank previously said it was bringing the gold home to help build public "trust and confidence."

Since the Cold War ended and times have changed, Germans need not worry about preventing their gold reserves from falling under Soviet control - a real fear during the Cold War.

Bundesbank also no longer needs to keep gold in Paris as a protective measure that would allow it to quickly exchange international currency in an emergency. Both countries use the euro.

In the wake of World War II, Germany gradually rebuilt its decimated gold reserves. As its economy strengthened, it converted the US dollars that paid for its exports to gold and stored the proceeds in foreign vaults.

Fears of Soviet invasion kept the reserves abroad even after the value of the dollar was decoupled from the price of gold.

In recent years, rumors and conspiracy theories circulated in Germany about its foreign gold reserves. Some fringe observers questioned whether they had been lost or otherwise compromised.

The issue eventually spilled over into mainstream politics, and the German Federal Court of Auditors asked for an inspection of foreign gold reserves in 2012.

The central bank mounted a defence, saying it received annual updates from foreign central banks where the gold was being stored. It said that the "integrity, reputation and security of these foreign depositories are beyond reproach."

The following year, however, the central bank announced that it would bring a large portion of its reserves home.

Just over 50 per cent of Germany's gold reserves now sit in Frankfurt. The remaining metal is held in London and New York, where it can be quickly exchanged for UK pounds or dollars in an economic emergency.