When Welsh Gold Went to Germany and Why It Had to Stop

It may sound strange today but for much of the early 20th century, Britain the empire of bankers and its bullion vaults routinely sent its raw gold to Germany to be refined. From the mines of Wales to shipments from South Africa, Australia and the empire. Tons of unrefined ore crossed the Channel each year to be processed in Hamburg, Frankfurt, and other German cities.

Germany had earned a formidable reputation for metallurgy. Its refineries used advanced chemical processes to draw the purest gold from even the most complex ores, producing bars of remarkable quality. The work was efficient, precise, and surprisingly economical. London might have been the heart of the global gold trade, but Germany was where it was at and the workshop where that gold was perfected.

For decades the system worked smoothly until politics began to poison the arrangement. By the mid-1930s, as Hitler’s Nazi regime rearmed and Europe darkened under the threat of war. British traders and mining houses began to worry. Could they really trust sending bullion into a country increasingly seen as an adversary?

By 1938, those fears became impossible to ignore. Following Germany’s annexation of Austria and the Sudetenland crisis in Czechoslovakia, British firms quietly halted shipments of gold across the Channel. The prospect of confiscation or a naval blockade loomed too large. Britain moved swiftly to expand domestic refining at the Royal Mint Refinery and private companies such as Johnson Matthey, ensuring the country could process its own bullion.

When war finally broke out the following year, that decision proved wise. Britain’s gold reserves, the foundation of its wartime economy remained safely under British control, no longer dependent on the precision of German chemists but on its own determination to endure.

After the War and the Rise of Britain’s Own Refiners

When peace returned in 1945, Britain’s gold industry emerged transformed. The war years had forced the nation to build its own refining infrastructure, and by the late 1940s London had become one of the world’s most trusted centres for precious-metal processing. The Royal Mint Refinery, operated by Johnson Matthey, played a central role in re-establishing global standards for purity and hallmarking. Ensuring that gold leaving Britain was of the highest quality.

Over the following decades, refining capacity spread beyond government mints to specialist firms in Switzerland, Belgium, and Italy, which became key players in the European bullion trade. By the 1970s, Switzerland’s refineries especially those clustered in the Ticino region near the Italian border  had overtaken London as the world’s premier hub for gold refining. Swiss neutrality, banking secrecy, and cutting-edge refining technology made the country an ideal centre for global bullion.

Today, the vast majority of the world’s newly mined gold is refined in just a handful of Swiss facilities which handle around 60–70 per cent of global production. Britain remains a powerhouse in gold trading rather than refining. The London Bullion Market Association (LBMA) sets international standards for “Good Delivery” bars that underpin the modern bullion market.

The journey of Britain’s gold from the furnaces of pre-war Germany to the secure vaults of London and the refineries of Switzerland mirrors the shifting landscape of global trust. Technology, and power. What began as a practical business decision became a reflection of European history, showing how even the world’s most precious metal cannot escape the forces of politics and war.