Only 10 countries control 50% of global gold reserves

Only 10 countries control 50% of global gold reserves

Gold’s scarcity and durability positions it as the perfect monetary asset hence the race by central banks and institutions to stock up their piles. The race to increase gold reserves has seen ten top global economies take the lead by amassing gold reserves almost half the size of the global tally.

Data investigated and calculated by Buy Shares shows that 49.37% of the global gold reserves are under the control of only ten countries. Globally, the total gold reserves stand at 1.85 billion ounces while the top ten countries cumulatively hold 913.29 million ounces in gold (or 25,891 tons). 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.

Among Institutions, the International Monetary Fund occupies the first spot but third when compared to countries 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 while France occupies the fifth spot with 85.91 million ounces in gold reserves or 4.6% of the worldwide tally.

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Our investigation revealed that Russia has the sixth-highest gold reserves at 80.89 million ounces or 4.3% of the worldwide 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 lies in the tenth spot with 22.11 million ounces accounting for 1.2% of the global gold reserves.

Lithium has the highest reserves among precious metals

Our research also investigated and calculated the number of ounces held by other precious metals globally. Precious metals refer to naturally occurring metallic chemical elements with a high economic value. From the data, Lithium holds the top spot with 492.37 billion ounces in global reserves. As of June 2020, 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. Among the top five precious metals, 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 repaying depositors. The reserves are also utilized to hedge against inflation, determine imports and exports, and determine the value of a country’s currency.

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 acts as an alternative for fiat currencies. In the future, gold is expected to keep playing a vital role in the foreign exchange markets.

It is worth mentioning that no contemporary government requires all of its currency to supported by gold. Nevertheless, governments still stock gold to safeguard against economic calamity.

However, not all central banks are involved in the net buying of gold. A country like Venezuela has been selling off its gold reserves to support the struggling economy that has been in turmoil for years.

Central banks to continue amassing gold due to economic uncertainty

Historically, gold has been known to be a safe haven for investors since it has the ability to weather any financial storms hence governments are in a race to stock up their piles. Although the United States continues to hold the largest gold reserves, there has been a shift. In the last five years, China and Russia have emerged as the top buyers of gold to rank in the top ten categories.

With the recent trade war between the United States and China, the price of gold has increased. Most investors have been uncertain about the economic future of each country’s economies. As a result gold demand has been high.

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.