French Central Bank's "Gold Withdrawal" Masterstroke: Not Shipping Gold, Not Provoking the U.S., and Netting 11 Billion Euros

Source: Jint Data

The Bank of France has found a clever way to move gold out of U.S. custody while avoiding diplomatic friction: it sold the gold at a high price in New York, and then bought it back on the European continent.

As part of its FY2025 announcement, the central bank disclosed a “special project,” which turned a €2.9 billion loss into an €8.1 billion annual profit.

In a news release dated March 25, the central bank said: “In 2025 and the early part of 2026, with the total amount of gold reserves remaining unchanged, the Bank of France had to adjust the remaining portion (5%) in accordance with technical guidance, thereby achieving a significant foreign-exchange realized gain. In 2025, this special foreign-exchange income totaled €11 billion.”

This operation is both shrewd and profitable. Unlike Germany’s gold reserves, which are largely stored in the United States and face a continuing predicament, the Bank of France did not try to raise the issue of extracting or transferring its gold. Instead, when the gold price hit historical highs, they sold those bullion bars—older in assay terms and with lower purity—based on their U.S. dollar value in New York, pocketed the cash proceeds, and then, when prices happened to fall again, bought back gold bars in Europe that met its latest weight and purity standards. Germany’s gold, meanwhile, remained in the vaults of the New York Fed, making many German political figures deeply unhappy.

For the Bank of France, this was a “three wins” deal: amid U.S.-Europe relations becoming tense due to tariffs, Greenland, Ukraine, and now the Iran issue, it did not provoke any diplomatic backlash from the U.S. government; it did not have to pay for transatlantic transportation and security costs; and the transaction itself also generated substantial profits, boosting the bank’s overall financial condition.

“They point out that the Bank of France’s net assets—composed of funds from its own resources plus unrealized capital gains on asset holdings—currently stand at €283.4 billion, extremely solid, and higher than the €202.7 billion in 2024,” they said. “The Bank of France’s net assets include a €11.4 billion national gold and foreign-exchange reserve revaluation provision, which is used to cover future monetary spending.”

Bank of France Governor François Villeroy de Galhau told reporters that the decision to store the new gold bars in Paris rather than New York was “not driven by political motives.”

After these transactions, the total amount of gold held by France remained unchanged—still about 2,437 tons—and all of the country’s gold reserves are now stored in the underground gold vault of the Bank of France in La Courneuve.