This is a VERY big deal.
Some context for foreign Gold storage: Nixon cut the dollars last ties to gold in 1971 when the French wanted gold for the money they lent us during the Vietnam war. He basically said, screw you, you’re only getting paper. This is a little appreciated source of Franco-American animosity. The situation with Germany is different. Because of the Soviet military threat, many European countries kept much of their gold reserves in the US.
The Concern: Many people believe the Fed doesn’t actually have Germany’s gold. People say this from varying depths of the rabbit hole of conspiracy. What’s clear is that the Fed has steadfastly resisted any audit of its gold.
Possible Outcomes: If the Fed continues to refused, as they’ve done with previous requests of the Bundesbank, it will cause a huge loss of confidence in the US Fed. (For some stupid reason, people still have confidence in the US gov’t.)
If those Germans continue to insist on their gold, as they should, then a gigantic house of cards might come tumbling down. The likely effects are a huge loss of confidence and a soaring gold price.
I think the more likely outcome at this point is that the media will being calling the Budesbank Nazis and they’ll retreat with their tail between their legs — but that will only work for so long.