Beginning in 2010, central banks around the world turned from being net sellers of gold to net buyers of gold. Last year, official sector activity raised 36% to 366 tonnes- a substantial increase from 2016. Data investigated and calculated by Buyshares.co.uk reveals that only ten countries control 49.37% of the global gold reserves. According to the data, the cumulative global gold reserve is 1.85 billion ounces. The ten countries control 25, 891 tons of gold. The United States leads the way with 286.86 million ounces or 15.5% of the total global gold reserves. Germany has the second-highest gold reserves at 188.63 million ounces which represent 6.4% of the global reserve.
The International Monetary Fund is third with 99.24 million ounces, accounting for 5.3% of the global reserve. Italy’s gold reserves of 86.47 million ounces make up 4.7% of the world total reserves. France occupies the fifth spot with 85.91 million ounces in gold reserves or 4.6% of the global tally. Russia has the sixth-highest gold reserves at 80.89 million ounces or 4.3% of the global cumulative reserves. China accounts for 3.8% at 69.54 million ounces while Switzerland lies in the seventh spot with 36.67 million ounces or 1.9% of the global total gold reserves. Japan’s 26.96 million ounces places it in the ninth spot to account for 1.5% of the global reserves. India is tenth with 22.11 million ounces accounting for 1.2% of the global gold reserves. Over the years, central banks have continued to accumulate gold reserves as it plays a key role in hedging against inflation, determine imports and exports, and determine the value of a country’s currency.
“Central governments might continue to stock up gold in their reserves due to the profound uncertainty that emerged as an impact of the coronavirus pandemic. With the stock market witnessing all-time lows, central banks view gold as the perfect option to guard the economy in the event of a similar crisis in the future”, the Buyshares.co.uk added in their statement. The Scoop in their research also calculated the number of ounces held by other precious metals globally as of June 2020. Lithium holds the top spot with 492.37 billion ounces in global reserves. Silver had the second-highest reserves globally at 19.3 billion ounces. Gold occupies the third spot at 1.85 billion ounces in reserves followed by Palladium at 1.21 billion ounces while Platinum has the least reserves at 1 billion.
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Gold reserves are the gold held by a national government through the central bank or a financial institution. The reserves are intended to act as a guarantee to repay the depositors. Gold has evolved to have a significant effect on global currencies. Over the years, the gold standard has been abandoned but gold as a commodity act as an alternative for fiat currencies. In the future, gold is expected to keep playing a vital role in foreign exchange markets. It is worth mentioning that no contemporary government requires all of its currency to be supported by gold. Nevertheless, governments still stock gold to safeguard against economic calamity.
It’s no surprise that the Bank of India has one of the largest stores of gold in the world. The South Asian country, home to 1.25 billion people, is the second-largest consumer of the precious metal and is one of the most reliable drivers of global demand. India’s festival and wedding season, which runs from October to December, has historically been a huge boon to gold’s Love Trade.
The central government might continue to stock up gold in their reserves due to the profound uncertainty that emerged as an impact of the coronavirus pandemic. With the stock market witnessing all-time lows, central banks view gold as the perfect option to guard the economy in the event of a similar crisis in the future.