The call is growing louder! Both the countries with the second and third largest gold reserves globally want to move their gold out of New York...

When reviewing the rankings of the world's major gold reserve holders, one can actually easily spot an interesting phenomenon:

Russia, ranked fifth, has always kept its gold reserves firmly in its own hands. The experience of the West's "forcible seizure" of its foreign exchange reserves following the Russia-Ukraine conflict has made it wiser;

France, ranked fourth, had already transferred most of its overseas gold reserves back to Paris by the mid-1960s, due to then-French President Charles de Gaulle's loss of confidence in the Bretton Woods system;

Germany and Italy, ranked second and third respectively, have seen a growing chorus of calls within their countries to withdraw their gold from New York this year, following repeated attacks on the US Fed by US President Trump and the intensification of geopolitical unrest...

As for the US, ranked first, the current administration may not even know how much gold it actually has in its vaults...

(Global Gold Reserves Ranking, Source: Trading Economics)

Obviously, in today's world where gold holds an increasingly prominent position in the capital markets, the latest developments regarding the safety of gold reserves among these top five gold reserve holders are undoubtedly quite intriguing—various signs indicate that even the US's traditional Western allies after World War II are now feeling increasingly uneasy about their gold stored in the US!

Public opinion in Germany and Italy is increasingly eager to "reclaim" their gold...

Fabio De Masi, a former Member of the European Parliament from Germany's Left Party who has now joined the left-wing populist party BSW, stated in a recent media interview that during "turbulent times," there are "strong reasons" to support transferring more gold to Europe or Germany.

According to data from the World Gold Council, Germany and Italy currently hold the world's second- and third-largest gold reserves, respectively—with reserves of 3,352 mt and 2,452 mt, second only to the US.

Meanwhile, both countries rely heavily on the New York Fed in Manhattan as their custodian, storing more than one-third of their gold in the US. According to industry calculations, the total market value of their gold stored at the New York Fed currently exceeds $245 billion.

Storing gold in the US, which is separated by vast oceans, is mainly due to historical reasons following World War II, and also reflects the long-standing status of New York as one of the world's most important gold trading hubs (alongside London).

However, Trump's erratic policymaking and broader geopolitical unrest have recently sparked increasing public debates within these two European countries about the safety of their gold reserves.

In Germany, the proposal to repatriate gold is gaining increasingly broad support from both left- and right-wing political parties.Peter Gauweiler, a well-known former conservative member of the Christian Social Union (CSU), recently emphasized that the German central bank "must not take shortcuts" in protecting the country's gold reserves.

"We need to address the question of whether storing gold overseas has become safer and more stable over the past decade," he added. "The answer is self-evident (no), as geopolitical risks have made the world a more insecure place."

It is understood that the European Taxpayers' Association has also recently sent letters to the finance ministries and central banks of Germany and Italy, urging policymakers to reconsider their reliance on the US Fed as their gold custodian."We are deeply concerned about Trump's interference in the independence of the US Fed," said Michael Jäger, president of the European Taxpayers' Association.

Jäger pointed out, "Our recommendation is to repatriate Germany's and Italy's gold to ensure that the European Central Bank has full control over it at all times."

Before Italian Prime Minister Giorgia Meloni's meeting with Trump in Washington in April, renowned economic commentator Giorgia Meloni (Note: The same name as the Prime Minister, likely a different person; here, the name is retained as per the original text) also wrote in the local newspaper Il Fatto Quotidiano, "Leaving 43% of Italy's gold reserves under the unreliable Trump administration in the US is very dangerous for the country's interests."

An "Historical Issue" in Need of Resolution

In fact, the reliance of European countries on the US Fed as a gold custodian has long been a point of contention.

During the economic boom of the first two decades after World War II, Western European countries accumulated vast gold reserves—at that time, they enjoyed significant trade surpluses with the US. Until 1971, the US dollar could be exchanged for gold through the US Fed under the Bretton Woods fixed exchange rate system. Storing precious metals across the Atlantic was also seen by many European countries as a hedge against a potential war with the Soviet Union.

France seemed to be the first to "wake up." In the mid-1960s, France began repatriating most of its overseas gold reserves back to Paris, as then-President Charles de Gaulle lost confidence in the Bretton Woods system.

In Germany, it was not until the grassroots movement "repatriate our gold" launched in 2010 that the German central bank's policy was completely changed. In 2013, the German central bank decided to store half of its gold reserves domestically, repatriating 674 mt of gold from Paris and New York to its headquarters in Frankfurt. This high-security operation also cost as much as 7 million euros.

However, currently, as much as 37% of the German central bank's gold reserves are still stored at the Federal Reserve Bank of New York.

In response, Peter Boehringer, a member of the far-right Alternative for Germany (AfD) party and the initiator of the grassroots movement, said, "When we started (proposing to repatriate the gold)... we were accused of spreading conspiracy theories."

But for Boehringer, the main reason for bringing the gold back home has nothing to do with the current US administration. "Gold is the last resort for central banks, so it needs to be stored without being affected by any third-party risks. In times of severe crisis, what truly matters is not only legal ownership but also physical control over the gold."

It is worth mentioning that in Italy, when the far-right Brothers of Italy party, led by Giorgia Meloni, was still in opposition in 2019, it lobbied for the repatriation of Italy's gold reserves. Meloni also vowed at the time that if her party came to power, it would bring Italy's gold back home.

However, since taking office as Prime Minister at the end of 2022, Meloni has so far remained silent on the matter, partly due to her desire to maintain friendly relations with Trump and avoid exacerbating trade wars.

Therefore, for both Germany and Italy, despite the growing calls from both the political arena and public opinion to repatriate their gold reserves, whether these calls will translate into concrete actions remains uncertain. Recently, Fabio Rampelli, a member of the Brothers of Italy party, stated that the party's current stance is that, given that Italy's gold is held by "historical friends and allies," its "geographical location" is only of "relative importance."

Bert Flossbach, a senior German investor, also made a similar argument: "Going through the trouble of repatriating the gold now might send a signal that relations with the US are deteriorating."