Three years ago tomorrow (16 January 2013), Deutsche Bundesbank announced that they would be repatriating 300 tonnes of
gold from New York and 374 tonnes from Paris by 2020, which was a revision of
their October 2012 promise they would transfer 150 tonnes from New York by
2015. So how have they progressed and are they meeting their schedule?
In January last year I did an analysis of the state of the German repatriation.
At that time Deutsche Bundesbank said they had “transferred 120 tonnes of gold to Frankfurt
am Main from storage locations abroad: 35 tonnes from Paris and 85 tonnes
from New York”, which, when added to the 32t and 5t (respectively) transferred in 2013 means they had transferred 157 tonnes
in total by December 2014.
Based on data accumulated each month from the US Federal Reserve
by Nick Laird of Sharelynx,
the Fed’s custodial gold holdings have reduced by 125 tonnes from January to
November 2015. I am fairly confident that all of these are German repatriations
as there hasn’t been any announcements of other central banks withdrawing
metal from the Federal Reserve’s vaults in New York. In addition, the amounts
delivered each month are similar to those that occurred in 2014, as the chart
below shows.
To-date, Germany looks to have returned 215 tonnes, which is well over
their initial promise of 150 tonnes. In this chart I forecast that based
on the monthly rate of 2015 withdrawals, Germany should have repatriated all
of their planned 300 tonnes by September 2016, putting them over three years
ahead of the “by 2020” target.
It seems what Carl-Ludwig Thiele, Member of the Executive Board of the
Deutsche Bundesbank, said in this interview with Handelsblatt in February 2014 was true: “the
Americans have never stonewalled or hindered us in any way. On the contrary,
their cooperation has been most constructive in every respect”.
By the end of this year Germany would have around 1,237 tonnes in New
York, which would be 37% of their total gold reserves. But why stop there? If
the US Federal Reserve and Germany have demonstrated that they can move
around 130 tonnes a year, then continuing on at that rate for the remaining 3
years and 3 months would result in another 422 tonnes back on German soil
with 814 tonnes left in New York (24%), surely enough, along with 400 or so
tonnes in London, “so that, when push comes to shove, we can have it
available as a reserve asset as soon as possible” (Carl-Ludwig Thiele in
October 2012)?
As to the Paris repatriations, we don’t have any independent indication of
what they have delivered during 2015. With a 374 tonne target, and
only 67 tonnes confirmed returned as at December 2014, Germany will have
to move at least 61.5 tonnes a year from 2015 through to 2019 to meet the
target. Anything less than that will raise questions, particularly
considering that it would have to be easier to ship gold from Paris to
Frankfurt than from New York.
Based on the dates of the previous repatriation updates, here and here, we should have our answer some time next week.
