Political circles and the public in Germany and Italy are calling for the repatriation of their gold reserves currently stored in the United States. The total market value of these reserves is estimated at $245 billion. According to reports from the Financial Times, proponents of this move point to the unpredictable actions of President Trump concerning Europe and his criticisms of Federal Reserve Chairman Jerome Powell as reasons for concern. However, experts suggest that accessing the underground storage facilities near the former Fort Knox military base in Kentucky, where US and other nations` gold is kept, appears to be an almost impossible task.
According to the World Gold Council, Germany holds the world`s second-largest gold reserves (3352 tonnes), and Italy holds the third-largest (2452 tonnes). More than a third of each country`s gold bars are located in the United States and are effectively under the control of the Federal Reserve System. This situation is largely attributed to historical circumstances and New York`s position as a leading global center for gold trade, alongside London.
The Association of European Taxpayers is particularly insistent on the withdrawal of gold from the US, having approached the finance ministries and central banks of Germany and Italy. Michael Jaeger, president of the association, stated, «We are very concerned that Trump is infringing on the independence of the Federal Reserve,» adding that European regulators should be in control of the gold. Earlier in June, the head of the White House warned the Fed that if it did not lower borrowing costs, he would have to «do something.»
«We need to decide whether storing gold abroad has become safer and more stable over the past decade or not,» said Peter Gauweiler, former deputy chairman of the Christian Social Union (CSU). Similarly, the Italian newspaper Il Fatto Quotidiano published an article ahead of Premier Giorgia Meloni`s April visit to Washington to meet Trump, suggesting that keeping 43% of Italy`s gold reserves in America under the current administration is «risky for national interests.» The Financial Times recalls that in 2019, Meloni`s right-wing party, Brothers of Italy, advocated for gold repatriation while in opposition.
Alexey Vyazovsky, vice-president of «Zolota Plata» company, believes that Germany and Italy do not fully own their gold reserves, drawing a parallel to the presence of American military bases in their countries. Speaking to MK, he suggested that the current calls from politicians and public figures are unlikely to lead anywhere. «They won`t see access to Fort Knox,» he stated, although he conceded that theoretically, they might be given a few tonnes out of the thousands. He questioned the seriousness of the demand, noting that even Trump and Elon Musk reportedly failed to obtain an audit of the vault to verify the existence and condition of the gold bars. He added that the international financial community also shares these valid concerns.
How should an audit be conducted?
Vyazovsky explained that the only method to verify the twelve-kilogram bars (each numbered) is to selectively drill them with a thin bit after they have been counted. The resulting shavings should be yellow; white shavings would indicate tungsten. Only after this verification could they potentially be moved – a two-step process. He asserts that the Fed, which is not accountable to anyone, would prevent this. However, he notes that the Fed`s autonomy and independence, along with abuses in monetary policy, negatively affect both the US and the rest of the world. Such issues contribute to a loss of overall trust in the dollar and risk its status as the world`s reserve currency. Jerome Powell himself has little to fear, with only 9 months left in his term. A person loyal to Trump is likely to replace him, but changing the status of the Fed, backed by powerful lobbies like Merrill Lynch and Morgan Stanley, seems impossible for anyone. He also recalled that the gold bars from Germany and Italy were sent to the US after the Second World War as collateral for American loans under the Marshall Plan for the reconstruction of Western and Central European countries.
