Which Country Has the Most Gold Reserves?
Countries hold gold as an investment to protect themselves against economic instability and inflation. Gold serves as a safe-haven asset that serves to hedge against future uncertainty and inflationary pressures.
U.S. gold reserves surpass those held by Germany, Italy and France combined; Russia and China are also major holders of precious metals.
India has an enduring cultural connection to gold, making the nation an essential driver of global demand.
United States
The United States boasts the world’s largest reported monetary gold reserves. Their official gold reserves are owned and held in custody by the Department of the Treasury at various facilities across the nation by US Mint.
Countries use gold reserves as a reliable store of value and to bolster their currencies during economic instability. Backing paper currency with gold was common during the 1800s and 1900s when gold became the go-to standard.
Germany
Germany boasts the second-highest gold reserves worldwide and has long embraced this yellow metal as a symbol of wealth preservation and stability.
As public outrage mounted due to the euro crisis, public concern prompted the Bundesbank to start transporting their gold back from Paris and New York – prompting speculation that some may have gone missing; however, all its gold has since been confirmed accounted for.
Italy
Italy’s central bank does not publicly reveal how much gold it holds abroad, though Italy has long held onto precious metals as an asset and amassed them over time.
Countries keep gold reserves as an economic hedge and as an insurance against economic uncertainty. Gold also acts as a store of value that gives citizens peace of mind.
Central banks purchased gold at their fastest pace since 1967 in 2022, signalling strong global economic uncertainty and strong consumer interest for this precious metal.
France
France currently ranks fourth worldwide in gold reserves. These reserves are held by Banque de France and housed in a vault called Souterraine that lies 27 metres beneath ground.
Bank of France stores gold on behalf of other central banks; one such customer is the Bundesbank which stores its gold in Paris.
France, like the US, Germany and Italy accumulated much of its reserves during the 1950s and 60s.
Russia
Gold for Russia is stored away in vaults spread out across 17,000-square meters across Russia, including Pravda Street in Moscow where Putin visited in 2011.
Experts applaud Russia’s resolve to increase its gold reserves, which rose by almost 20% this year as sanctions from the U.S. for its invasion of Ukraine were implemented.
Yellow metal also protects governments against sanctions by sidestepping international banking networks like SWIFT and correspondent banks; its sale can occur via shadow markets overseas.
China
China is often considered to have one of the sixth-largest gold reserves worldwide, but this estimate may be inaccurate as China holds over US$ 3 trillion in foreign currency reserves and only reports their gold holdings as part of this total figure.
Still, China’s central bank has increased its purchases of gold. Perhaps they are trying to reduce reliance on US dollar reserves and build trust in their own currency?
Switzerland
Switzerland boasts the seventh-largest official gold reserves worldwide with 1,040 tonnes, surpassing those held by Germany, Italy and France combined. Each Swiss citizen owns approximately 128 grams of this precious metal (not counting any jewelry or personal items made of gold).
Although most countries abandoned the gold standard during the 1970s, many still maintain large stocks as insurance against hyperinflation or another economic crisis. As of February 2024, 70% of Switzerland’s gold is stored with SNB; 20% in London; and 10% in Canada.
Japan
Japan has an extensive history of gold mining and one of the largest known reserves. Japan’s central bank uses gold to diversify its foreign reserves portfolio.
Non-permanent residents in Japan must understand the tax implications associated with gold investment income and adhere to reporting requirements. There are various investment opportunities for non-permanent residents such as domestic and international gold mutual funds, cryptocurrencies and Japanese government bonds for investing in gold in Japan.
India
India’s immense gold reserves demonstrate both its financial strength and stability. Their substantial holdings also demonstrate international credibility as they show commitment to sound economic policies.
While the gold standard no longer applies, many countries still believe that maintaining substantial reserves of yellow metal provides stability to currency values and reduces risks associated with other asset value fluctuations. Gold also holds spiritual and cultural significance in countries like India.
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