In a world full of economic uncertainties, the countries with the largest gold reserves are far better equipped to deal with difficult situations than other nations. The reason for this is quite simple: when markets crash and the value of currencies drop, the price of gold tends to rise. After all, gold has always been a sought-after commodity, while the demand for national currencies varies according to macroeconomic factors.
In the past, the value of a nation’s currency was tied to the gold standard, which explains why this commodity is considered as the perfect fail-safe. Should a country experience an economic crisis, its central bank can sell gold in order to counteract the loss of value of the national currency. Hence, the countries with the largest gold reserves have more chances than their peers to provide some stability in tough situations. In addition, reserves serve as collateral, making it easier to acquire loans. Taking on debt might not be the best idea during a crisis, yet it is always better to be able to count on this option if necessary.
Before we present you with the list of the 10 countries with the largest gold reserves, there are some things that need to be explained. First of all, it is important to know that central banks are responsible for holding reserves, since they are the primary financial institution in just about any nation. Second, although one would expect the top 10 gold producing countries in the world, which we covered in a previous article, to possess important reserves, this is not necessarily true. In fact, some of the countries in the following list have no gold-mining industry at all! Since gold is a commodity, central banks can easily purchase the desired amount on the open market. Thus, wealthy nations have the best chances of making it onto the list of the countries with the largest gold reserves, presented below.
10. India – 557.7 Tonnes
India might not be the wealthiest of nations, yet it is the most populated country on the planet, and thus has a huge economy. Hence, it shouldn’t be surprising to learn that it holds a great deal of gold reserves as well.
We head to Europe next on our countdown of the countries with the largest gold reserves. Is it Switzerland? Germany? The U.K? Head to the next page to find out.
9. Netherlands – 612.5 Tonnes
Despite its small size, the Netherlands has always been known for having a strong economy. Gold reserves are crucial to this nation, since its fate is heavily tied to foreign trade.
8. Japan – 765.2 Tonnes
Holding large reserves is very important for Japan, since its currency is notoriously weak. Without hefty backing, the Yen could be in serious trouble if a crisis were to appear.
7. Switzerland – 1,040 Tonnes
Since Switzerland is known as the world’s banker, we are by no means surprised to see it on our list. After all, with such a large banking industry, it is only natural the Swiss have been able to horde large amounts of gold.
6. China – 1,054 Tonnes
The Asian economic powerhouse has done extremely well over the past few decades, turning into the largest exporter in the world. China’s solid performance has allowed it to rise quickly through the ranks.
5. Russia – 1,168 Tonnes
When it comes to Russia, one thing is certain: they have a lot of everything, including gold. The largest country in the world might not have the strongest economy, yet the government is keen on recovering its position in the world.
4. France – 2,435 Tonnes
France is not only a major player in the world economy, but is also one of the pillars of the European Union. As such, it has put great effort into providing financial stability.
3. Italy – 2,451 Tonnes
Due to the events of the past few years, we surely didn’t expect to see Italy on this list, never mind make it into the top three. Yet despite recent economic troubles, the Italian Central Bank still commands some of the world’s biggest gold reserves.
2. Germany – 3,384 Tonnes
Germany not only has the most powerful economy in Europe, but is also well known for being highly organized. As such, the government has always made sure gold reserves were kept high, something that has paid off in recent years.
1. United States – 8.133 Tonnes
The Federal Reserve of the United States holds by far the largest gold reserves in the world. Having such huge deposits is necessary, since the US has tremendous debt obligations and a currency that is used all over the world for foreign trade.
