Bundesbank “Reassures” Re. Gold Bullion Reserves as Deutsche Bank Shocks With €6 Billion Loss Warning

The German Bundesbank released an inventory of its gold reserves yesterday in order to quell ongoing public concerns about the true amount of actual unencumbered reserves and the location of the reserves stored in vaults in Frankfurt, London, Paris and particularly in the New York Federal Reserve.

GoldCore: Bundesbank Gold Reserves

(Photo: Reuters)

The central bank said its gold reserves amount to 3,384 tonnes of gold worth just €107 billion at today’s prices.

The move is the latest by the central bank, which is in the process of trying to move its gold reserves back to Germany after the eurozone sovereign debt crisis broke out in 2012 and led to public concerns and questions about the safety of Germany’s gold reserves.

Germany’s gold reserves are the second biggest in the world after those of the U.S. but Germany has been struggling to repatriate its gold reserves from the U.S. Federal Reserve in recent years. This has created wider concerns about the U.S. own gold reserves.

GoldCore: Bundesbank Reserves

See Bundesbank Announces Repatriation of 120 Tonnes of Gold from Paris and New York Federal Reserve

The Bundesbank also helpfully provided a massive 2,302 page report, presumably in an attempt to create further transparency and understanding of the issue which remains an important one to large sections of the German political and financial class and the public who are concerned about a new Eurozone debt crisis and the ongoing debasement of the euro.

During the Cold War the West German Bundesbank was happy to keep its gold in the U.S. in case of nuclear war or an invasion from East Germany and the Soviet Union. Today there are public concerns about the Federal Reserve’s gold reserves and the indeed the precarious U.S. fiscal situation.

Hence, the desire to have clarity re the exact nature of the amount and legal ownership of the gold (possible gold lending, swaps etc) and having the gold reserves on German soil again in case of another U.S, Eurozone and global financial crisis or indeed a likely global monetary crisis.

Deutsche Bank Shocks With €6 Billion Loss Warning
Coincidentally, on the same day Deutsche Bank has warned it will lose a whopping €6.2 billion ($7 billion) in the third quarter, its biggest quarterly loss in at least a decade and potentially ever.

GoldCore: Warren Buffett Quiote

Many of those voicing concerns about the gold reserves are also concerned about the still unreformed, out of control and very fragile banking system.

In a peculiar late night announcement that shocked analysts globally, Germany’s biggest bank blamed huge “impairment charges” of €5.8 billion for the unexpected losses. Forecasts had been for profits of around €1 billion.

The charges are related to “higher capital requirements” for Deutsche’s investment bank and the reduced value of its Postbank division, which is up for sale.

On top of this, the bank is setting aside €1.2 billion to cover litigation costs. Like other banks, Deutsche has been caught up in the Libor-rigging scandal and faces another investigation in Switzerland for suspected price-fixing in the precious metal market.

Gillian Tett, ourselves and many others have warned that Deutsche and its massive derivative book has the potential to be a ”European Lehman Brothers”. Is Deutsche Bank, the largest holder of Warren Buffett’s “financial weapons of mass destruction” derivatives in trouble?


Today’s Gold Prices:  USD 1143.30, EUR 1011.59 and GBP 745.31 per ounce.
Yesterday’s Gold Prices: USD 1147.90, EUR 1021.45 and GBP 750.43 per ounce.

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Gold in Euro- 1 Year

Gold was flat yesterday and finished just $1.20 lower, closing at $1145.80.  Silver closed at $16.02, up another $0.22 for the day, a 1.4% gain.  Euro gold rose to about €1019, platinum gained $11 to $943.


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Mark O'Byrne
Executive Director