Golden opportunity as bullion on the move
Q How do you transport 54,000 gold bars from New York and Paris to Frankfurt?
When the German Bundesbank announced on Thursday that it was going to start repatriating 674 metric tonnes of its foreign gold reserves from Paris and New York, it wasn’t just the world’s master criminals who paused to wonder how they were going to transport it.
Germany has built up significant global gold reserves through trade surpluses. In recent years there has been vocal domestic pressure to bring it home, though the Bundesbank denies it is bowing to public demands.
The 674 tonnes, worth about €27 billion at today’s rates, are in the shape of 54,000 gold bars weighing 12.5kg, so this is going to be quite the operation – all the 374 tonnes at the Banque de France and 300 of Germany’s 1,500 tonnes stored in the New York Federal Reserve will be returned to Frankfurt.
The Bundesbank is staying tight-lipped about the logistics, but has given itself until 2020 to repatriate all that bullion, so there won’t be dozens of giant shipments or convoys for daring thieves to target – it would be effectively impossible to insure any such transportation.
It is assumed that the gold bars will be brought back by degrees, a few gold bars flown back at a time under top-secret circumstances, with suitable insurance provisions in place.
The last time there was such a huge gold movement was in 1936 when the government of Spain moved 510 tonnes from Madrid to Moscow after the outbreak of the Spanish Civil War.
Back in 2011, Venezuelan president Hugo Chávez announced he was determined to bring Venezuela’s foreign-held gold from Europe back to Caracas. Despite scepticism, he followed through in theatrical fashion, 160 tonnes returned on flights over three months. The final shipment, according to Bloomberg, was quite the event: “The gold bars were transported in a caravan, broadcast on state television, to vaults at the central bank where street banners proclaimed ‘Mission Complete’.”