German Auditors Urge Inspection of Foreign Gold Reserves

This issue had popped earlier this year. I wonder if this is a case of someone simply noticing that an audit hadn't been performed for a long time, or if there are suspicious movements or trading of gold that have sparked concerns. The real story, though, may be simply the fact that Germany no longer is trusting of keeping its gold in the U.S., France or Britain.

German federal auditors have called on the country's central bank to regularly look into the quality of its gold reserves stored at banks abroad. The Bundesbank has conceded a physical check has never been carried out.

German media reports on Tuesday confirmed the country's central bank, the Bundesbank, would bring back a certain part of its gold reserves it had been storing abroad. While not specifying the amount of gold bars in question, the Bundesbank said the measure to start in 2013 would serve to check the quality of the gold.

The Bundesbank said gold bars would be completely melted as the only way of checking their purity thoroughly and would afterwards be cast into bars again.

German federal auditors on Monday once again urged the central bank to inspect at least part of its nearly 3,400 tons of gold valued at 133 billion euros ($174 billion). "Germany's gold reserves abroad have never been checked physically regarding their authenticity or weight," the auditors wrote in a report to lawmakers.

Like many central banks, the Bundesbank has always kept part of its reserves in vaults of financial institutions abroad, including the Federal Reserve Bank of New York, the Banque de France and the Bank of England.

(Full story here).