European Countries Are Withdrawing Gold Secured in USA- Impact of Japanese Bond Market – Why You Should Care

European Countries Are Withdrawing Gold Secured in USA- Impact of Japanese Bond Market – Why You Should Care

In January, Germany is considering withdrawing $194 Billion or 1236 tons of gold in the Federal Reserve back to Germany citing risk from Trump’s unpredictability and shifting geopolitical ties. This is 37% of its total gold reserves stored in the US.

Sweden is withdrawing $8.8 billion in gold from the US Treasury – January 25, 2026

Denmark is selling off their US Treasuries- around 100 million by the end of January, 2026

Italy is discussing withdrawing its 2,452 tons of gold or $300 Billion from the USA

Why You Should Care- Withdrawal of gold put pressures on the US dollar and reduces its liquidity. The US financial system and its custodian of global gold reduces demand for US Treasuries and that results in increases in borrowing costs, causes interest rates to rise and slows economic growth.

And, then there is the current Japanese bond market crisis when the Japanese central bank raised its interest rates .75% and the 40-year note surpassing 4% for the first time since 2007. This narrowed the yield spreads between Japanese and US bonds which will trigger outflows from the US equities and bonds- which means that Japanese investors will accelerate the selling of US assets.

When government bonds yield rise, borrowing becomes more expensive pushing up mortgage rates, corporate loans and discount rates used to value stocks and real estate, signaling a lack of trust in the market.