Central Banks Flee Foreign Vaults as Geopolitics Reshape Reserve Strategy

European central banks are quietly moving their gold reserves from foreign vaults to more secure locations. France was the first to do so in 1963, when it began secretly removing its gold from New York under the codename 'Vide-Gousset', or 'empty pockets'. The operation, led by President Charles de Gaulle and economist Jacques Rueff, aimed to reduce France's dependence on a monetary system they no longer trusted.

De Gaulle had become suspicious of the Bretton Woods arrangement, which pegged the dollar to gold at $35 an ounce. He suspected that America could issue dollars while running persistent deficits, undermining the convertibility of the dollar into gold.

Fifty years later, European central banks are moving their gold again, citing 'increasing geopolitical unrest', diversification, and crisis preparedness. The Netherlands recently moved 86 tonnes of its gold from North America to London, which now holds the largest share of its reserves.

The decision was not a repatriation in the classical sense, but rather a reorganization of where the gold is stored. The Dutch sold 59 tonnes of gold in New York and purchased equivalent bullion in London, while physically transporting 27 tonnes from the US and Canada to the Netherlands.