The Dutch central bank has relocated more than 78 metric tons of gold out of New York, citing ‘increasing geopolitical unrest,’ becoming the latest European country to reduce its US precious metal holdings. The move has prompted questions about whether Gulf sovereign wealth funds and central banks should reconsider their own reserve arrangements.
De Nederlandsche Bank reallocated approximately 86 total metric tons of gold held across the US and Canada, largely moving it to London, according to the Financial Times. DNB governor Olaf Sleijpen said the relocation was designed to ‘strengthen readiness for a crisis’ and improve the ‘tradeability of our gold reserves.’
Earlier this year, France eliminated its remaining New York gold holdings, selling 129 metric tons and repurchasing equivalent gold in Paris. The Banque de France ruled out a political explanation at the time. Germany, which holds 3,350 metric tons of gold with 1,236 tons stored in New York, has seen lawmakers publicly question whether keeping reserves in the US remains prudent.
For the UAE and Gulf states, the European gold repatriation trend raises strategic questions. Gulf sovereign wealth funds, among the world’s largest, hold significant assets in US financial institutions. The UAE Central Bank maintains substantial reserves, and any shift in trust regarding US custodial arrangements could have implications for how Gulf states manage their reserves.
The debate centers on whether Trump’s unpredictable policies create risk for foreign holdings in the US. Markus Ferber, a German member of the European Parliament, warned last year that Trump’s unpredictability created risk around holding foreign reserves in the US. Michael Jäger of the European Taxpayers Association has been more blunt, arguing German gold was ‘no longer safe’ in Fed vaults.
However, Bundesbank President Joachim Nagel has rejected these concerns, stating that foreign central bank assets enjoy special legal protections and that the US would ‘hurt itself most’ if it called that status into question. The New York Fed acts as custodian rather than owner of foreign government bullion, and US law generally shields foreign central bank assets from being seized.
None of the European officials has suggested the US plans to confiscate reserves. Nevertheless, the trend of gold repatriation reflects a broader shift in how nations view geopolitical risk and the concentration of assets in single jurisdictions.
Source: NY Post
