Telegraph reports Bundesbank repatriated 1,440 tons from London a decade ago
Germany withdrew two thirds of its vast holdings of
gold from Bank of England vaults shortly after the launch of the euro more than a decade ago, according to a confidential report by German auditors.
The revelation came as Germany's budget watchdog demanded an on-site probe of the country's remaining
gold reserves in London, Paris, and New York to verify whether the metal really exists.
The country has 3,396 tons of
gold worth 143 billion euros, the world's second-largest holding after the US. Nearly all of it was shifted to vaults abroad during the Cold War in case of a Soviet attack.
Roughly 66% is held at the New York Federal Reserve, 21% at the Bank of England, and 8% at the Bank of France. The German Court of Auditors told legislators in a redacted report that the
gold had "never been verified physically" and ordered the Bundesbank to secure access to the storage sites.
It called for repatriation of 150 tons over the next three years to test the quality and weight of the
gold bars. It said Frankfurt has no register of numbered
gold bars.
The report also claimed that the Bundesbank had slashed its holdings in London from 1,440 tons to 500 tons in 2000 and 2001, allegedly because storage costs were too high. The metal was flown to Frankfurt by air freight.
The revelation has baffled
gold veterans. The shift came as the euro was at its weakest, slumping to $0.84 against the dollar. But it also came as the Bank of England was selling off most of Britain's
gold reserves -- at market lows -- on orders from Gordon Brown.
Peter Hambro, chair of the UK-listed gold miner Petropavlovsk, said the Bundesbank may have withdrawn its
bullion in self-protection since it did not, apparently, have its own specifically allocated bars in London. "They may have decided that the Bank of England had lent out too much
gold, and decided it was safer to bring theirs home. This is about the identification. Can you identify your own allocated
gold, or are you just a general creditor with a metal account?"
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