After decades of being safeguarded overseas, the nation’s gold reserves — a large part of them, at least — are once again safe in Frankfurt.
Not that the gold was ever in danger of being stolen, according to the Bundesbank, the German central bank, which is in charge of the reserves. But the Bundesbank said on Thursday that it had completed a planned transfer of some $13 billion in gold bars that for historical reasons had been stored in vaults deep below Lower Manhattan.
Whether gold matters anymore is questionable in an age of Bitcoin and digital payments. Even paper money is losing importance.
But at least for some Germans, many of them nostalgic for the deutsche mark, gold provides reassurance that the embattled euro is underpinned by something tangible.
“From a scientific point of view you could say it’s no longer necessary,” Jörg Krämer, chief economist at Commerzbank in Frankfurt, said of the gold reserves. “However, credibility is very important. Gold is perceived as trustworthy. Therefore it still plays a role.”
During the Cold War, when the country was on the front lines of East-West conflict, West Germany moved large amounts of its reserves abroad out of fear they would be seized by an invading Soviet army. Even after the Berlin Wall fell in 1989, the gold stayed overseas.
One reason it took so long to bring it back is that moving gold is not so easy. It is heavy and an obvious target for thieves.
But the Bundesbank began repatriating some of the gold in 2013 after an official audit found shortcomings in the way the reserves were accounted for. The bank has been secretive about how it moved the gold, to discourage anyone who might try to steal it.
The audit, in 2012, provoked a political outcry among Germans who were shocked to learn that much of their gold was stored not only in Manhattan but also in Paris and London. Rumors circulated that some of the gold was missing.
Although there was no evidence of that, the Bundesbank announced a plan to return enough of the gold so that half the reserves would be stored at the central bank’s vaults in Frankfurt by 2020. That goal has almost been reached, with 48 percent of the gold already in Germany.
A move involving 300 tons from New York was completed last year, three years ahead of schedule, Carl-Ludwig Thiele, a member of the Bundesbank’s executive board, said in its statement on Thursday.
Gold bars accounting for more than one-third of the total reserves will remain in New York; about 13 percent will stay in London. The Bundesbank plans to withdraw all the gold stored in Paris. It has already moved 283 tons, with 91 tons left to go.
The rationale for leaving some of the gold in New York and London is that they are major trading centers, and the gold could be deployed quickly if the euro collapsed or some other catastrophic economic event occurred. So far, the only gold sold by the Bundesbank has been in the form of commemorative coins.
Germans may feel safer with the gold in Frankfurt, but James Rickards, a gold expert and author of “The New Case for Gold,” said that removing the reserves from New York and London could destabilize the gold market.
Central bank gold reserves are routinely leased to banks, which use them as the basis for securities linked to gold. Stored in Frankfurt, Mr. Rickards said, the gold is no longer in circulation, leaving less available for lease at a time when demand for gold securities is high.
“There is less floating supply,” he said. “It makes the market more unstable.”
While gold’s value is mostly sentimental, Mr. Krämer of Commerzbank acknowledged that it still exerted a powerful influence on the human imagination.
“Have you ever touched real gold?” he said. “It has a kind of fascination. Even as an economist I can feel this.”