Which Country Has the Most Gold Reserves?
Gold reserves are an integral component of financial stability for any nation. Historically, nations used their gold reserves as security against fluctuating paper currencies; and today they still utilize this resource in protecting themselves against currency fluctuations and foreign exchange valuations.
Which country holds the greatest reserves of gold? The United States boasts more than 8,133 metric tons – nearly twice what Germany, Italy, and France combined possess.
United States
The United States boasts the world’s largest reported gold reserves. These assets are held by the Treasury and stored mostly at Fort Knox by way of US Mint custody; with smaller amounts also kept by Federal Reserve Bank of New York custody.
Central banks incorporate gold into their investment portfolios as an insurance against inflation and to hedge against risk. Traditionally, gold was bought with fiat currency; however, since the global financial crisis this view has changed.
Goldhub uses IMF data to track official foreign reserve holdings and gold reserves of countries around the world. Click here to access a comprehensive data dashboard.
Germany
Germany boasts the second-largest gold reserves worldwide despite having one of the smallest populations, attributable to Germans’ strong affinity for this precious yellow metal, as evidenced by crowds turning out in full force at Bundesbank open days held between 2014 and 2017.
After World War II, as Germany was rebuilding its economy, they converted many of the dollars paid to exporters into gold and stored it overseas in order to prevent its capture by Soviet forces during the Cold War.
Italy
Countries often keep significant gold reserves as an insurance against economic volatility and fluctuations, providing protection from economic turbulence or foreign currency fluctuations. Governments and central banks around the world maintain large holdings to meet this need for security.
Italy stores 64% of its forex reserves in Palazzo Koch in Rome’s vaults; the remaining holdings can be found in London and Bern.
The Bank of Italy does not disclose specific figures regarding how much gold bullion it holds overseas, although most is held by the Federal Reserve Bank of New York.
France
France holds the fourth- and fifth-largest gold reserves worldwide (when including those held by the IMF). Their 2,435.4 tonnes are managed by Banque de France and stored 27 metres underground in La Souterraine vault – which won an international architecture prize.
France maintains private gold reserves that dwarf those held officially, making these holdings essential to France’s economic and global standing as well as serving as an important reminder of France’s longstanding connection to this precious metal.
Russia
Russia has long held onto gold reserves; dating back to its czars. Now two-thirds of official reserves in Russia consist of this precious metal.
Each month-end, the Bank publishes on its website its international reserves position in US Dollars – comprised of foreign exchange reserves, SDRs and gold.
Russia’s official gold reserves are safely secured within vaults in both Moscow and St Petersburg buildings of the Bank of Russia, in form of variable-weight standard gold bars. President Putin visited one of these 17,000-square meter vaults back in 2011.
China
China’s state-owned central bank, the People’s Bank of China (PBoC), plays a significant role in its gold market by overseeing Shanghai Gold Exchange – China’s premier gold exchange.
However, unlike its private sector counterparts, PBoC does not buy and sell directly on the open market. According to Long, it may have purchased more gold than disclosed but would rather maintain stability than cause further disruptions on the market.
Given its increasingly volatile relationship with the United States, Russia may want to reduce its reliance on dollar reserves as reserves accumulate in that currency.
Switzerland
Switzerland is renowned as an important gold refining and storage center. Indeed, its constitution used to mandate that at least 40% of Swiss Francs be backed by gold.
Swiss citizens have an intense devotion to gold. Voters regularly vote to require the central bank to keep its gold reserves within Switzerland – something which could possibly see holdings more than triple in three years!
Switzerland exports gold to Asian markets via existing “Good Delivery” bars sent for transformation into smaller bars like kilobars in Switzerland.
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