Why Did France Move 129 Tonnes of Gold from New York City? Explained

Historically speaking, gold can be used as a major analytical tool for determining economic power and security at the national level. 

Numerous countries hold on to large amounts of their gold in both domestic and foreign locations for reasons of finance and strategic protection. 

In France’s case, by agreeing to repatriate massive amounts of its gold from storage in New York City, the French government has created international media buzz and brought attention to the past, present, and future of financial sovereignty, trust in the global monetary system, and the importance of holding gold today. 

The ability to assess France’s reasoning for repatriating its gold and any potential financial ramifications resulting from this decision requires further clarification of the circumstances surrounding this event.

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Why Did France Take Back Its Gold?

The French motion to take back their precious metallic gold happened between 1960 & 1970 during the presidency of Charles De Gaulle. 

During that time, France moved approximately 129 tons of their currency, when they converted into precious metal gold pieces, from United States bank vaults back to France.

In this instance, France was attempting to reduce dependency upon the currency of the United States, the U.S. dollar, and gain economic freedom by withdrawing their wealth from the U.S. banking system and banking in Britain, which were both reasons for taking back their gold.

Reasons for Taking Back Gold

1) Distrust in the U.S. Dollar System

Under the Bretton Woods Agreement, the U.S. Dollar was unit of measure that subsequently turned into the world's reserve currency and was able to be converted into gold. 

Attaining this goal was a massive building program for the United States Government and economy. 

The financial and political supremacy of the United States having the US dollar was not how it began prior to World War I.

2) Establishing Economic Sovereignty

President De Gaulle established the principle of having control of national currency rather than depending upon some storage facility owned by a foreign government.

3) Lack of Trust in Currency & Currency Values

Gold can be stored and removed as required, and due to uncertainty made possible by potential dollar value, gold was a safe-haven once brought back to France.

How Did France Benefit Financially?

1. Increase in Gold Prices

Gold was well received internationally after 1971 when the Bretton Woods system collapsed. Because France had physical gold, its position got better with all of this gold’s pricing going up.

2. Improved Financial Security

Gold also provided a hedge against inflation and devaluation, thus enhancing France's position

3. Monetary Advantage

In addition to providing France with a hedge against dollar devaluation by allowing France to invest in gold, it also gave France an opportunity to take advantage of the future appreciation of gold.