Europe sent its gold to the U.S. for safe keeping during World War II. Central banks are now reshuffling their reserves for a new era of uncertainty

During World War II, Europe sent its gold reserves to the United States for safekeeping. The New York Fed has long been the custodian of these gold reserves on behalf of various governments and organizations. After the war, the stockpile reached its peak in the early 1970s but has since declined to about half of its original amount.

France recently moved all its gold from the New York Fed, while the Dutch central bank relocated over 78 tons of gold from New York to London, citing geopolitical unrest and the need for crisis preparedness. Germany and Austria have also moved large amounts of gold from New York to their respective countries. Despite rising global tensions, central banks around the world have been redistributing their gold holdings for years, along with adding to their reserves.

The current wave of gold movements is driven by heightened geopolitical uncertainty, with central banks prioritizing custody risk, physical accessibility, and market liquidity. Some central banks are increasing domestic storage, while others are spreading it out to more overseas locations, signaling a priority for diversification of custody.