Gold reserve

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Switzerland's gold reserves.
World Gold Reserves from 1845 to 2013, in tonnes (also known as metric tons in the United States)

A gold reserve is the gold held by a national central bank, intended as a store of value and as a guarantee to redeem promises to pay depositors, note holders (e.g., paper money), or trading peers, or to secure a currency.

At the end of 2004, central banks and investment funds held 19% of all above-ground gold as bank reserve assets.

It has been estimated that all the gold mined by the end of 2011 totalled 171,300 tonnes.[1] At a price of US$1500 per troy ounce, reached on 12 April 2013, one tonne of gold has a value of approximately US$48.2 million. The total value of all gold ever mined would exceed US$8.2 trillion at that valuation.[note 1]

IMF gold holdings[edit]

As of June 2009, the International Monetary Fund held 3,217 tonnes (103.4 million troy ounces) of gold,[2] which had been constant for several years. In the third quarter of 2009, the IMF announced that it will sell one eighth of its holdings, a maximum of 403.3 tonnes, based on a new income model agreed upon in April 2008, and subsequently announced the sale of 200 tonnes to India, 10 tonnes to Sri Lanka,[3] a further 10 tonnes of gold were also sold to Bangladesh Bank in September 2010 and 2 tonnes to the Bank of Mauritius.[4] These gold sales were conducted in stages at prevailing market prices.

The IMF maintains an internal book value of its gold that is far below market value. In 2000, this book value was XDR 35, or about US$47 per troy ounce.[5] An attempt to revalue the gold reserve to today's value has met resistance for different reasons. For example, Canada is against the idea of revaluing the reserve, as it may be a prelude to selling the gold on the open market and therefore depressing gold prices.[6]

Gold reserves and their relevance in war times (Example from WW II)[edit]

Preserving the gold reserves is of intrinsic value to nations and therefore highly relevant in contexts of crisis and war. A typical example is a secret memorandum by the Chief of the Imperial General Staff from October 1939, at the beginning of World War II. The British Military and the British Secret Service laid out “measures to be taken in the event of an invasion of Holland and Belgium by Germany” and presented them to the War Cabinet:

“It will be for the Treasury in collaboration with the Bank of England, and the Foreign Office, to examine the possible means of getting the bullion and negotiable securities into the same place of safety. The transport of many hundreds of tons of bullion presents a difficult problem and the loading would take a long time. The ideal would of course be to have the gold transferred to this country or to the United States of America. [...] The gold reserves of Belgium and Holland amount to about £ 70 million and £ 110 million respectively. [Foot]Note: H. M. Treasury has particularly requested that this information, which is highly confidential should in no circumstances be divulged. The total weight of this bullion amounts to about 1800 tons and its evacuation would be a matter of the utmost importance would present a considerable problem if it had to be undertaken in a hurry when transport facilities were disorganised. At present this gold is believed to be stored at Brussels and The Hague respectively, neither of which is very well placed for its rapid evacuation in an emergency.”[7]

The Belgian government rushed to get the gold out of the country into a safe place: Dakar. After the Germans had occupied Belgium and France in 1940 they demanded the gold reserve back. Vichy French officials took care of the transport and in 1941 handed almost 5,000 boxes with 221 tons of gold[8] over to officials of the German Reichsbank.

Officially reported gold holdings[edit]

Gold reserves per capita

The International Monetary Fund regularly maintains statistics of national assets as reported by various countries.[9] These data are used by the World Gold Council to periodically rank and report the gold holdings of countries and official organizations.

The gold listed for each of the countries in the table may not be physically stored in the country listed, as central banks generally have not allowed independent audits of their reserves.

As at December 2013 (Top 40 based on World Gold Council data)[10]
Rank Country/Organization Gold
(tonnes)
Gold's share
of national
forex reserves (%)
- G6 (EU) 8,972.6 76%
1  United States 8,133.5 70%
2  Germany 3,387.1 66%
3 International Monetary Fund logo.svg International Monetary Fund 2,814.0 N.A.
4  Italy 2,451.8 65%
5  France 2,435.4 65%
6  China 1,054.1 1%
7  Russia 1,041.9 8%
8   Switzerland 1,040.1 8%
9  Japan 765.2 2%
10  Netherlands 612.5 51%
11  India 557.7 7%
12  Turkey 519.7 15%
13 Logo European Central Bank.svg European Central Bank 502.1 26%
14  Taiwan 423.6 4%
15  Portugal 382.5 84%
16  Venezuela 367.6 72%
17  Saudi Arabia 322.9 2%
18  United Kingdom 310.3 12%
19  Lebanon 286.8 23%
20  Spain 281.6 23%
21  Austria 280.0 47%
22  Belgium 227.4 33%
23  Philippines 193.2 9%
24  Algeria 173.6 3%
25  Thailand 152.4 4%
26  Kazakhstan 143.7 23%
27  Singapore 127.4 2%
28  Sweden 125.7 7%
29  South Africa 125.1 10%
30  Mexico 123.1 3%
31  Libya 116.6 4%
32 BIS-logo.PNG Bank for International Settlements 115.0 N.A.
33  Greece 112.2 75%
34  South Korea 104.4 1%
35  Romania 103.7 8%
36  Poland 102.9 4%
37  Australia 79.9 6%
38  Kuwait 79.0 9%
39  Indonesia 78.1 3%
40  Egypt 75.6 16%
41 Brazil Federative Republic of Brazil 67.0 1.0%
42 Denmark Kingdom of Denmark 66.5 3.5%
43 Pakistan Islamic Republic of Pakistan 64.4 27.4%
44 Argentina Argentine Republic 61.7 7.2%
45 Belarus Republic of Belarus 49.4 24.5%
46 Finland Republic of Finland 49.1 21.3%
47 Bolivia Plurinational State of Bolivia 42.3 13.6%
48 Bulgaria Republic of Bulgaria 40.0 9.3%
49 West African Economic and Monetary Union 36.5 12.0%
50 Malaysia Malaysia 36.4 1.2%
51 Ukraine Ukraine 36.4 6.7%
52 Peru Republic of Peru 34.7 2.3%
53 Slovakia Slovakia 31.8 64.7%
54 Nepal Nepal 30.1 22.9%
55 Iraq Republic of Iraq 29.8 2.0%
56 Ecuador Republic of Ecuador 26.3 28.1%
57 Syria Syrian Arab Republic 25.8 6.5%
58 Morocco Kingdom of Morocco 22.0 5.7%
59 Afghanistan Islamic Republic of Afghanistan 21.9 13.8%
60 Nigeria Federal Republic of Nigeria 21.4 2.0%
61 Sri Lanka Democratic Socialist Republic of Sri Lanka 16.6 11.2%
62 Serbia Republic of Serbia 16.6 4.8%
63 Jordan Hashemite Kingdom of Jordan 14.2 5.5%
64 Cyprus Republic of Cyprus 13.9 65.8%
65 Bangladesh People's Republic of Bangladesh 13.5 4.2%
66 Cambodia Kingdom of Cambodia 12.4 11.1%
67 Qatar State of Qatar 12.4 1.4%
68 Czech Republic Czech Republic 11.0 1.1%
69 Colombia Republic of Colombia 10.4 1.2%
70 Laos Lao People's Democratic Republic 8.9 34.4%
71 Ghana Republic of Ghana 8.7 7.1%
72 Paraguay Republic of Paraguay 8.7 6.2%
73 Latvia Republic of Latvia 7.7 4.6%
74 Myanmar Republic of the Union of Myanmar 7.3 4.4%
75 El Salvador Republic of El Salvador 7.3 10.6%
76 Guatemala Republic of Guatemala 6.9 4.3%
77 Republic of Macedonia Republic of Macedonia 6.8 11.1%
78 Tunisia Tunisian Republic 6.7 4.4%
79 Tajikistan Republic of Tajikistan 6.4 51.1%
80 Azerbaijan Republic of Azerbaijan 6.0 2.0%
81 Republic of Ireland Ireland 6.0 16.6%
82 Lithuania Republic of Lithuania 5.8 3.5%
83 Mongolia Mongolia 5.8 7.4%
84 Bahrain Kingdom of Bahrain 4.7 3.7%
85 Brunei Nation of Brunei, the Abode of Peace 4.0 4.9%
86 Mauritius Republic of Mauritius 3.9 5.2%
87 Mozambique Republic of Mozambique 3.7 6.6%
88 Kyrgyzstan Kyrgyz Republic 3.3 7.1%
89 Canada Canada 3.2 0.2%
90 Slovenia Republic of Slovenia 3.2 18.5%
91 Aruba Aruba 3.1 18.5%
92 Hungary Hungary 3.1 0.3%
93 Bosnia and Herzegovina Bosnia and Herzegovina 3.0 3.1%
94 Luxembourg Grand Duchy of Luxembourg 2.2 10.7%
95 Hong Kong Hong Kong Special Administrative Region 2.1 0.0%
96 Iceland Republic of Iceland 2.0 2.2%
97 Papua New Guinea Independent State of Papua New Guinea 2.0 2.3%
98 Trinidad and Tobago Republic of Trinidad and Tobago 1.9 0.9%
99 Albania Republic of Albania 1.6 2.8%
100 Yemen Republic of Yemen 1.6 1.2%
Sum 31,320.4 Excludes G6 figure as countries separately listed

Privately held gold[edit]

As of October 2009, gold exchange-traded funds held 1,750 tonnes of gold for private and institutional investors.[11]

Privately held gold (May 2011)[12]
Rank Name Type Gold (Tonnes)
1 SPDR Gold Shares ETF 1,239
2 ETF Securities Gold Funds ETF 259.79
3 ZKB Physical Gold ETF 195.53
4 COMEX Gold Trust ETF 137.61
5 Julius Baer Physical Gold Fund ETF 93.50
6 Central Fund of Canada CEF 52.71[13]
7 NewGold ETF ETF 47.75
8 Sprott Physical Gold Trust CEF 32.27
9 ETFS Physical Swiss Gold Shares ETF 27.97
10 Bullionvault Bailment 37.1[14]
11 Central GoldTrust CEF 18.81[15]
12 GoldMoney Bailment 19.55[16]

World gold holdings[edit]

World gold holdings (2008) (Source: World Gold Council)[17]
Holding Percentage
Jewellery 52%
Central banks 18%
Investment (bars, coins) 16%
Industrial 12%
Unaccounted 2%

See also[edit]

Notes[edit]

  1. ^ One tonne is equal to approximately 32,150.75 troy ounces.

References[edit]

  1. ^ FAQs > Investment > World Gold Council
  2. ^ "Gold in the IMF". International Monetary Fund. 2009-09-18. 
  3. ^ "Press Release: IMF Announces Sale of 10 Metric Tons of Gold to the Central Bank of Sri Lanka". Imf.org. Retrieved 2012-01-08. 
  4. ^ "Press Release: IMF Announces Sale of 2 Metric Tons of Gold to the Bank of Mauritius". Imf.org. Retrieved 2012-01-08. 
  5. ^ "IMF completes off-market gold sales". 2000-04-07. 
  6. ^ "BBC NEWS | Business | Gold falls on IMF sale concerns"
  7. ^ Memorandum by War Cabinet Secretary E. E. Bridges from October 6, 1939, Secret: Holland and Belgium: Measures to be taken in the event of an invasion by Germany. P. 1 and 4. National Archives
  8. ^ Other sources report only 41 tons.
  9. ^ "Data Template on International Reserves and Foreign Currency Liquidity -- Reporting Countries"
  10. ^ "Gold Demand Trends Q4 2013", "Top 40 reported official gold holdings" is on page 18 of the pdf file.
  11. ^ [1]
  12. ^ "FACTBOX-Precious metals holdings of exchange-traded products | News by Country | Reuters". Af.reuters.com. 2011-06-06. Retrieved 2012-01-08. 
  13. ^ "Central Fund's Net Asset Value". Centralfund.com. 2000-03-16. Retrieved 2012-01-08. 
  14. ^ "Daily Audit - Allocated Gold Bar Lists and Bank Statements". BullionVault.com. 2011-12-21. Retrieved 2012-01-08. 
  15. ^ "GoldTrust's Net Asset Value". Gold-trust.com. 2000-03-16. Retrieved 2012-01-08. 
  16. ^ "Total Gold, Silver, Platinum, Palladium and Currencies in GoldMoney". Goldmoney.com. 2011-12-30. Retrieved 2012-01-08. 
  17. ^ "DollarDaze Economic Commentary Blog - Gold, Oil, Stocks, Investments, Currencies, and the Federal Reserve: Two Methods for Estimating the Price of Gold by Mike Hewitt". Dollardaze.org. Retrieved 2012-01-08.