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Geopolitics and finance: the growing risk of global fragmentation
Geopolitical uncertainty is having an increasingly significant impact on capital flows and cross-border financial transactions. The result is a system in which certain operations are being delayed, reconsidered or subjected to greater scrutiny.
A shift in the rules of the international game, accompanied by uncertainty over the future decisions of political and economic actors is at the heart of this process.
Particular attention is being paid to the United States, now under the administration of Donald Trump and to the possibility of rising tension between Washington and other major global powers.
The growing reliance on power-based approaches rather than traditional rule-of-law mechanisms is also fuelling concerns about possible retaliation, sanctions and the potential freezing or seizure of foreign capital.
Why central banks are repatriating gold
The growing fragmentation of the international geopolitical landscape is having an increasingly significant impact on global macroeconomic architecture. In this context, liquidity crises, geopolitical risk and a growing focus on the security of reserves are altering the strategies adopted by central banks.
The need to reposition or repatriate part of the assets held abroad therefore does not appear to be merely a precautionary measure. Rather, it is a sign of structural change affecting the international financial system, the management of reserves and the circulation of liquidity.
The crisis in European industry and financial risk
Adding to this picture is the situation on the Old Continent. Europe’s manufacturing sector is going through a particularly challenging period, caught between the strategic and economic rivalry between the United States and China and the return of geopolitical tension that seemed to be part of a bygone era.
In a financial system characterised by growing uncertainty over the availability and mobility of liquidity, European institutions have begun adopting defensive strategies.
One of the most significant examples involves Nederlandsche Bank (DNB).
Nederlandsche Bank moves gold from New York to London
The Dutch central bank has decided to transfer over 78 tonnes of gold previously held in New York to London, along with a further 7 tonnes from Canada.
Only 27 tonnes were physically transported across the Atlantic. The remainder was managed by selling the gold in the United States and subsequently repurchasing it on the British market.
Governor Olaf Sleijpen justified the move by referring to “growing geopolitical turmoil”, emphasising the importance of increasing the bank’s operational flexibility and resilience in the face of potential future shocks.
The choice of London was no coincidence. The British capital is, in fact, one of the world’s leading hubs for the gold-market, with trading volumes exceeding $900 billion per week.
France: 129 tonnes of gold withdrawn between 2025 and 2026
Another significant operation was carried out by France between July 2025 and early 2026.
Paris withdrew 129 tonnes of gold, equivalent to approximately 5% of its total gold reserves. The operation also made it possible for France to capitalise on the price differential between the main Anglo-Saxon financial markets, generating an estimated capital gain of €12.8 billion.
The significance of these operations extends beyond the simple management of gold reserves.
In a scenario characterised by the risk of a slowdown or temporary freeze in institutional transactions, having access to physical and readily mobilisable assets can serve as an additional means of preserving financial operations.
Central Banks and the repatriation of gold: a global trend
This phenomenon is not limited to Europe. Growing interest in repatriating gold reflects a broader focus on the security of national reserves and more generally, on diversification away from traditional Western financial centres.
According to the latest data from the World Gold Council, 19% of the central banks surveyed have increased the share of their reserves held within their own countries. This represents a significant increase compared with the 7% recorded in 2025.
India is among the countries taking the most active approach.
India repatriates 274 tonnes of gold
Over a three-year period, India repatriated 274 tonnes of gold, bringing the share of its gold reserves held within the country to almost 80% by mid-2026.
India’s strategy therefore forms part of the wider trend among central banks to reduce their dependence on foreign financial infrastructure and depositories considered to be strategically sensitive.
Russia, Singapore and Hong Kong: gold flows are being rerouted
The reorganisation of reserves is also affecting countries that have been progressively excluded from the main international financial circuits.
This is the case in Russia, which has been subject to sanctions following its invasion of Ukraine. A significant share of gold flows and other physical assets is gradually being redirected toward alternative financial hubs.
Among the main beneficiaries of this reorganisation are Singapore and Hong Kong.
During the first seven months of 2026, Hong Kong reportedly absorbed approximately 100 tonnes of Russian gold, which is in all likelihood to be subsequently channelled to China, now a key strategic partner for Moscow.
Bank of Italy: no gold repatriation planned
The trend towards repatriation is not, however, uniform.
The Bank of Italy, the world’s fourth-largest holder of gold with 2,452 tonnes, does not currently have any plans for new repatriation programmes.
Italy’s reserves are distributed across several jurisdictions: approximately 45% is held in Italy, whilst the remainder is distributed between the United States (43%), Switzerland (6.1%) and the United Kingdom (5.7%).
This strategy is based on a different rationale to that adopted by some other central banks. Maintaining a significant portion of reserves across various international financial hubs helps contain logistical costs and above all, ensures rapid access to financial markets should the need to liquidate assets arise.
Germany reaffirms its confidence in the U.S. financial centre
Germany has adopted a similar stance.
Following the costly repatriation of 674 tonnes of gold completed in 2013, the Bundesbank has recently ruled out any further transfers of its reserves.
Bundesbank President Joachim Nagel, whilst acknowledging the particular fragility of the current geopolitical landscape, reiterated his confidence in the legal soundness of New York as a financial centre at the beginning of 2026.
According to this view, any intervention by the United States against assets belonging to foreign investors or institutions would have far-reaching consequences for international confidence, to the extent of undermining the reputation of the United States itself as a global financial centre.
Gold and liquidity: different strategies, same risk
Central banks are pursuing different strategies: some institutions are increasing the repatriation of their gold reserves, whilst others, such as the Bank of Italy and Bundesbank, continue to rely on geographical diversification of their reserves.
At the heart of both approaches, however, lies the same fundamental need: to ensure the security, liquidity and operational availability of reserves in an increasingly uncertain geopolitical context.
Clarissa Van Vuuren
Honorary President
PROYTEC GROUP
Sources
- Brookings Institution / CEPR Geneva Report — Is the global financial system fracturing under geopolitical pressure?
- ESMA (European Securities and Markets Authority) — TRV Risk Monitor Report
- T. Rowe Price Market Insights — Geopolitical fragmentation raises risk premium
- The Payments Association — Cross-border payments: Friction and reform
- The Financial Times / SL Guardian — Dutch Gold Shift Signals Growing European Anxiety Over US Reserves (3 Settembre 2026)
- The European — European Central Banks Move Gold Out of U.S. as Geopolitical Risks Mount (7 Settembre 2026)
- SunSirs Analysis — Gold Migration Reshapes Global Reserve Landscape (10 Settembre 2026)
