Central banks repatriate gold from U.S. vaults amid rising tensions
European central banks are relocating gold reserves away from U.S. vaults at a faster rate, a development tied to growing geopolitical tensions and financial instability concerns. This strategy aims to spread storage locations and ensure easier access to reserves during emergencies.
In early September, De Nederlandsche Bank (DNB) transferred 86 tons of gold from the U.S. and Canada to London. DNB stated, “In view of increasing geopolitical unrest, DNB is strengthening its crisis preparedness. Improving the liquidity and tradability of the Dutch gold reserves is part of these preparations.”
France’s Banque de France completed its repatriation earlier this year, bringing all 2,437 tons of gold back to Paris, including 129 tons from New York. Germany’s Bundesbank initiated a similar move a decade ago, transferring 300 tons from New York to its own vaults. DNB now holds 612.4 tons of gold in London, valued at €72.2 billion.
Central banks are making these adjustments based on careful calculation rather than alarm. The focus lies in balancing national control, liquidity needs, and proximity to dollar markets. Globally, central banks have increased gold purchases, adding 1,000 tons annually since 2022, compared to 500 tons per year in the previous decade. Total reserves now exceed 40,000 tons, comprising about a quarter of global bullion holdings.
Rising gold prices are also driving this trend. Goldman Sachs predicts gold will reach $4,900 per ounce by year-end, up from $4,600 in late August. While some view these moves as unsettling, experts highlight practical reserve management. Daniel Coatsworth, head of markets at AJ Bell, noted that central banks need to ensure they can buy and sell gold quickly in a crisis, despite typically holding it in secure storage.
London has emerged as the preferred destination for repatriated gold due to its status as a major trading hub. The Bank of England holds 400,000 gold bars worth over £200 billion. This shift reflects central banks’ efforts to adjust risk exposure in response to an evolving financial system, rather than distrust in the U.S.
