President Trump’s recent policies have many countries considering the relations they have with America. Recently, he introduced reciprocal tariffs that target 57 countries, with rates soaring to 50%. The tariffs went into effect on April 5th, with each nation having to pay a 10% tariff at a minimum.
Now Germany is considering moving its gold reserves from the U.S. Federal Reserve. This is quite a change, considering the European country has stored this precious metal in New York for decades.
Germany raked in riches after the second world war when its exports rose significantly, leading to huge trade surpluses. The Bretton Woods system then helped convert these surpluses into gold. According to a German newspaper, top brass from the Christian Democratic Union have had discussions on whether to move their bullion as concerns about whether America is a reliable partner arise.
In an interview, Marco Wanderwitz revealed that the issue had been raised. Wanderwitz, a German lawyer and politician of the Christian Democratic Union, has previously championed the right of the country’s officials being allowed to withdraw and/or inspect the gold.
This opinion is shared by Markus Ferber, a fellow party member and politician. Ferber maintains that official Bundesbank representatives should count the bars personally and record their results. Germany’s gold reserves in Manhattan make up 30% of its reserves globally and have an estimated value of £96 billion, which is equivalent to €113 billion.
Roughly half of the remaining reserves are stored at the Bundesbank while another 13% of its reserves are held in London. Before Trump’s second term, storing the precious metal in an American vault was seen as practical, as it afforded countries access to dollar liquidity if need be.
When approached for comment on the suggestion of moving the gold to Frankfurt, the Bundesbank stated that the U.S. Federal Reserve was a reliable and trustworthy partner in the storage of its reserves.
This sentiment isn’t shared by all though. One member of the Taxpayers Association of Europe, Michael Jäger, believes the best decision would be to bring all the reserves back into the country or at least Europe as soon as possible.
In other news, the country has implemented reforms on borrowing that would exempt defense projects valued at 1% of the GDP from the debt brake rule. Their objective is to strengthen the country’s army, terminate its dependence on American troops and weapons, and fortifying Europe’s rearmament.
As gold continues to play a more central role in geopolitics, bullion could continue to rise in price and actors like Torr Metals Inc. (TSX.V: TMET) could field increasing levels of investor interest.
NOTE TO INVESTORS: The latest news and updates relating to Torr Metals Inc. (TSX.V: TMET) are available in the company’s newsroom at https://ibn.fm/TMET
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