According to The World Gold Council, the Central banks bought 118 tonnes of gold in early 2014, making it a 28% increase. The European Central bank, along with the other European central banks, have signed the fourth Central Bank Gold Agreement. In this agreement, the central banks are said to have no plans to sell large amounts of gold, and plan to have their gold and their reserves will last for five years, starting at the end of September 2014.
MSM has observed that Russia has moved up two spots in the rankings when it saw a major increase in their gold reserves since February 2014. According to the World Gold Council, Global official gold holdings are totaling at 31,812 tonnes since August 2014.
Let’s take a look at the 10 countries that have the largest gold reserves according to Business Insider.
India stands at number 10 with 557.7 tonnes of gold, with 7.3% in gold in foreign reserves. India is expecting their gold imports to decline for the third year, all the while the Indian central bank monitors these imports. This past June, the Reserve Bank of India became more flexible with their loan rules.
India’s government has tried to discourage people from making purchases of precious gold. The blame for India’s high current account deficit has been placed on gold imports. Raghuram Rajan, India’s central bank governor, has noted that he believes that India can pay off its debt with gold.
Netherlands holds the 8th spot with 612.5 tonnes of gold, with 54.3% of it in foreign reserves. Much of Netherlands gold reserves are being held in the United States, while some are being held in the U.K. and Canada. Around 10% of their gold is expected to be in Amsterdam. Earlier in the year, Netherlands is interested in repatriating its gold.
With 765.2 tonnes of gold, Japan places at the 8th position on this ranking. Their foreign reserves in gold is at 2.5%. In 1950, Japan’s gold reserves were sitting at 6 tonnes, but saw its first jump in 1959 with a purchase of 169 tonnes.
In 2011, the Bank of Japan decided to sell their gold in order to invest ¥20 trillion into their economy due to the tsunami and nuclear disaster they faced that year.
Switzerland holds 1,040 tonnes of gold with 8% in foreign reserves, solidifying its position at 7. This past July, a $17.7 billion half-year gain was reported by the Swiss central bank, partially due to the recovering gold prices seen in the market.
When the World Gold Council reported that it was no longer believed to be necessary to hold gold for monetary policy purposes in 1997, a few years later, Switzerland sold 1,300 tonnes of what it believed to be their surplus in gold.
China holds 1,054.1 tonnes of gold, with 1.1% being in foreign reserves. In 2013, China recently overtook India for the spot of being the world’s largest gold consumer. Although they have the 6th largest gold reserve, it is still a small percentage of their $3.7 trillion in other foreign exchange reserves. It is important for China to build up its gold reserves due to them making moves to internationalize their currency.
Russia is at the 5th position with 1,094.7 tonnes of gold, with 9.7% of it being in foreign reserves. They have been increasing their gold holdings since this past February, eclipsing that of China and Switzerland. Russia has also decided to increase their amounts of gold and away from the euro and dollar due to them facing economic sanctions. 2013 marked the first time Russia’s central bank gold holdings rose above the 1,000-tonne mark.
France holds 2,435.4 tonnes of gold with 65.1 percent of it being in foreign reserves, placing them at number 4. In late 2004, France sold 572 tonnes of their gold, and 17 tonnes were transferred due to a purchase of BIS shares. France has reported that they have no plans on selling their gold reserves because they believe it provides them with the confidence and diversification in dealing with the volatility that they go through on their balance sheets.
Italy has 2,451.8 tonnes of gold, with 67% of that being their foreign reserves. Italy has no plans of selling their gold, and have never sold any gold under CBGA 1 or 2. However, in 2011, Italian banks did suggest they were interested in buying more gold in order to boost their balance sheets.
With 3,384.2 tonnes of gold, with it making up 68.4% of their foreign reserves, Germany holds the second highest position. In October, Germany reduced their gold holdings. 6 to 7 tonnes of gold is sold from the Bundesbank every year to the finance ministry.
1. United States
The number 1 spot is held by the United States, with 8.133.5 tonnes of gold in their reserves, with 71.9 percent of that in foreign reserves. At their peak, their gold reserves were at one point totaling 20,663 tonnes in 1952, finally dipping below the 10,000 mark in 1968.