Economists in Germany proposed that the country should repatriate the gold it holds in U.S. vaults. Gold (GLD) is at around the $5,000 level as global markets continue to flee from the U.S. dollar.
The Trump Administration’s unpredictable relations with Germany are the primary reason that economist Emanuel Mönch said, “in the interest of greater strategic independence from the U.S., the Bundesbank would therefore be well advised to consider repatriating the gold.”
Germany is the second-largest holder of gold reserves after the U.S., with 1,236 metric tons. It stored the gold at the Federal Reserve in New York. More than half of its gold is held at the Bundesbank in Frankfurt. 37% of it is held in New York, and 12% is held at the Bank of England.
If the U.S. president has the primary interest to generate revenue, Germany’s gold is not safe to leave in the U.S. Fed’s vaults. Instead, Germany would benefit from holding that gold domestically. It would give investors an anchor of trust, according to Germany’s Green Party finance spokesperson, Katharina Beck.
Investors should watch gold miners. Newmont Mining (NEM), Barrick (B), and Freeport-McMoRan (FCX) continued their historic climb to new highs in the last week. Gold Miner ETF (GDX) offers investors a basket of gold mining firms.
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