There is 34,700 tons of gold reserves in the world. A lot of countries keep gold reserves that serve as a stabiliser against hyperinflation triggered by major crises such as the one we are currently facing.
Not all the world’s gold comes from mining. A lot of the gold that is circulated comes from the gold recycling industry which consists of gold dealers that buy used gold for cash and sell it to refineries.
Here is a list of countries that have the most gold reserves. Some of the countries in the list are amongst the richest nations in the world and they are able to buy gold bullion in substantial amounts. Whilst most countries obtained their gold by buying it from others, gold dealers do not care much about where your gold comes from as long as you have good quality grade gold to sell, you will get someone who is interested in buying it.
Russia has been furiously buying gold for its reserves. This relentless buying spree was the key pillar of support for the global gold market. Russia is said to have stockpiled 2,279.2 tonnes of gold bullion worth $120 billion. Gold bullion makes up 20.6% of the country’s foreign reserves, which is quite high compared to other central banks.
As of January 2020, France had 2,436 tonnes of gold reserves. That amount of gold is worth $122.4 billion. France is one of the major European countries that have managed to stockpile a substantial amount of gold which will come in handy during inflationary times.
The issue of gold reserves held by central banks came under the spotlight in 2019 when news broke that the country’s government was considering selling part of the country’s 2,451.8 tonnes gold reserves to cover its spending plans and avoid increasing VAT. This however, sparked questions about who owns the gold, the state or the Bank of Italy? The last time Italy sold its gold was between 1974 and 1978 when 542 tonnes of the gold held in the U.S Fed vault in New York was used as collateral for loans provided by Germany. Rumour has it that the loans were paid off without any of the gold being sold. Countries and individual investors buy gold bullion as a hedge against financial risks. So, it’s safe to say that Italy still has gold worth $123.2 billion that it can use to get some international loan should it need to.
Germany has 3,366.5 tonnes of gold in reserve. A lot of this gold was stored in foreign vaults until 2017 when the government decided to repatriate German gold. At 74% gold represents a large percentage of the country’s foreign exchange reserves.
- United States
As of January 2020, the US had 8,133.5 tonnes of gold reserves worth about $408.7 billion. This gold is held between the US Mints at West Point and Denver as well as Fort Knox. Tens of thousands a of. US gold reserves were shipped to Europe in an attempt to suppress the gold price at $35/ oz during the 1960s. By 1968, many US creditors were demanding gold over US dollar. There is a lot of speculation of whether the U.S had the amount of gold it claims to have in reserve or whether most of what it had was sold off. The fact that there has been no official third-party audit of America’s gold reserves ramps up speculations and doubts of whether the gold reserve figures are real. Until an official audit is done and the results tell us otherwise, America will continue to have the world largest gold reserves.