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Repatriation of Bundesbank's Gold

The Bundesbank is to repatriate a large chunk of its substantial gold reserves held in New York and Paris (click here for story). Two questions immediately spring to mind. Why do central banks still hold large amounts of gold even though currencies are no longer tied to gold? Why is the Bundesbank pulling its gold reserves back to Germany? Some analysts see the Bundesbank's move as a sign of an impending currency war. Others see it as the world moving towards a de facto gold standard!

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