Gold has known to seduce the man’s wildest dreams and the deepest desires of greed since the ancient time. from Greece’s 5th Century B.C Construction of the Gold Sculpture of Zeus to 1800’s Gold Rush in USA, From Ancient Egypt’s Pharaohs Ornaments to Queen of England’s Crown Jewells, gold has had a unfading mark upon humankind’s evolution as a modern civilization and has revealed certain prospects of human creativity, craftsmanship, wild imagination and desire.
Top 10 Countries With The Largest Gold Reserves
- United States: 8,133.5 Tonnes
- Germany: 3,374.1 Tonnes
- Italy: 2,451.8 Tonnes
- France: 2,435.9 Tonnes
- China: 1,842.6 Tonnes
- Russia: 1,715.8 Tonnes
- Switzerland: 1,040.0 Tonnes
- Japan: 765.2 Tonnes
- India: 618.2 Tonnes
- Netherlands: 612.5 Tonnes
What Is A Gold Reserve?
A gold reserve refers to the gold (Either as gold bricks or bold biscuits) that is held by a Central Bank of a country.
- It is mainly used as a store of value. Apart from this, gold reserves are used to,
- Guarantee to redeem promised pays to depositors, noteholders, and trading partners
- Highly useful during wartimes and financial crisis periods
- Gold is an intrinsic currency that is accepted anywhere in the world without a third-party guarantee. Unlike currencies such as US Dollars and Sterling Pounds, which requires a guarantee from those respective governments
- To support the “Fiat” currencies during financial crisis periods and difficult times
Intrinsic And Fiat Currencies
- Fiat currencies are currencies that hold value because it is issued by a primary authority. Their value derives from the power of government.
- Intrinsic currencies are often made of precious metals such as gold, at any given time, anywhere in the world they have a value, without the need for someone to guarantee it.
Contemporary Changes In Gold Reserves
United States Federal Reserve holds the largest gold reserve in the world. That is one of the main reasons behind US dollars’ high value compared to other world currencies. US holds such a vast reserve of gold to maintain the US dollar as the world’s primary currency.
US Gold reserve is more than twice the size of the next nation with the largest gold reserve, Germany. And nearly three times as much as that of the 3rd ranking nation, Italy.
Gold reserves of the USA value approximately more than 375 billion dollars. That is more valuable than the Gross Domestic Product of Columbia.
However, the other nations are rapidly acquiring and collecting gold to their reserves as well, at a rapid rate. Also, some countries possess an advantage in having the ability to access natural and domestic gold sources. For example, China ranked 6th in our list, may have only a reserve of 1800 metric tones yet China has plenty of natural gold resources to acquire gold from. Also, if we consider a country like Australia, which is not in our top 10 list, still, we have the world’s largest natural gold resources in their country.
Russia recently had a bad time with the West and especially the USA and Europe due to their political and military interventions in Syria’s civil war and attachment of the Crimean Peninsula from Ukraine. Because of this, the Russian Central Bank has been the largest buyer of gold during the past decade. Russia is currently engaged in an effort to diversify away from the US Dollar, so they want to have to rely on US Dollars in their international monetary affairs.
Gold Reserves Of The G8
If you look at the top 10 list closely, you can see 6 out of 8 nations in G-8 in here. they are,
And if you are looking for the other 2 guys, don’t worry! One of them is in the next 10 nations with the largest gold reserves. Canada is the only nation from the top 20.
Largest Gold Reserves – Top 11/20 Nations
- Taiwan: 423.6 Tonnes
- Portugal: 382.5 Tonnes
- Kazakhstan: 375.3 Tonnes
- Uzbekistan: 351.5 Tonnes
- Saudi Arabia: 323.1 Tonnes
- United Kingdom: 310.3 Tonnes
- Lebanon: 286.8 Tonnes
- Spain: 281.6 Tonnes
- Austria: 280.0 Tonnes
- Poland: 228.2 Tonnes
More than 50% of the world’s wealth lies in the G-8 nations. And possession of gold reserves is one of the main reasons for 8 countries to hold such a vast amount of wealth.
If you look closely, you’ll see that in the top 10 list, 6 nations, excluding the USA, have been global Empires from the 15th century to the 20th Century:
and if you consider the top 20 list, the number of former colonial powers (empires) becomes 10:
- United Kingdom
There is a historical reason behind this phenomenon as well. During the era of the empires, these nations acquired or rather took by force, the gold, treasure and the valuable metals and materials from their occupied territories, especial from Asian colonies and African colonies. Thus, they had the chance to accumulate more gold in their empire’s national treasuries.
Apart from countries, two other transnational bodies or international authorities hold gold reserves of significant value. They are, the IMF, International Monetary Fund and European Central Bank. Each Holding 2814 tonnes and 504.8 tonnes of gold respectively.