Which countries have the highest gold reserves in 2022?
The world’s largest gold reserve holdings are in the United States. The next four nations in line for holding the most gold are Germany, Italy, France, and Russia. These five nations round up the top 5.
Why do Countries hold Gold Reserves?
Since the beginning of time, gold has been used as money, which eventually led to the creation of the gold standard.
The gold standard, which was widely employed in the 19th and 20th centuries, was a monetary system in which nations guaranteed the value of their coins and paper money by storing corresponding amounts of real gold behind closed doors.
As economies developed, the gold standard became less useful and is no longer utilized by any nation in the world. However, a lot of countries still have sizable gold reserves.
The Gold standard came to an end in 1971. The moves taken by President Richard Nixon in 1971 to end the dollar’s convertibility to gold and enact wage/price controls were meant to solve both the internal issue of inflation as well as the international conundrum of an impending gold run.
The aftereffect of these economic policies is referred to as the “Nixon Shock.”
Let’s quickly review the history of the system, which was in use until 1971
A new international monetary system known as the Bretton Woods system was created in 1944 at a meeting of 44 nations in Bretton Woods, New Hampshire. The new approach was expected to “maintain currency rate stability, avoid competitive devaluations, and encourage economic growth,” according to conference attendees. The Bretton Woods system didn’t start working fully until 1958. Countries now settled their international accounts in dollars, which the US government could redeem for gold at a predetermined exchange rate of $35 per ounce. Thus, other currencies were tied to the dollar, and the United States was committed to backing every dollar used abroad with gold. Source: Federalreservehistory.org
Top 10 Countries holding the biggest Gold ReservesGold Reserves by Country by Jeyaraj Sinnappan
The top 10 countries holding the most gold reserves. Source: statistics published by Gold.org
- United States of America – 8133.47 Tons
- Germany – 3355.14 Tons
- Italy – 2451.84 Tons
- France – 2436.50 Tons
- Russia – 2298.53 Tons
- China – 1948.31 Tons
- Switzerland – 1040.00 Tons
- Japan – 845.97 Tons
- India – 768.80 Tons
- Netherlands – 612.45 Tons
Countries with less than 1 Ton of Gold Reserves
- Honduras – 0.69 Tons
- Dominican Republic – 0.57 Tons
- Chile – 0.25 Tons
- Estonia – 0.25 Tons
- Nicaragua – 0.10 Tons
- Malta – 0.09 Tons
- Burundi – 0.03 Tons
- Fiji – 0.03 Tons
- Kenya – 0.02 Tons
- Oman – 0.02 Tons
Countries with Zero Gold Reserves
Interestingly, the following 5 countries have Zero Gold Reserves.
Why does Canada not hold any Gold Reserves?
The Bank of Canada started off in the early 2000s by selling its gold holdings. At the moment, Canada is the only G7 country without any declared gold holdings.
According to David Dodge, former Governor of the Bank of Canada, “gold is an outdated commodity, and the Bank of Canada was right to get rid of its gold reserves. It costs to hold gold, whereas holding U.S. or Chinese or Euro bonds yields a return.”
Watch his entire interview with KITCO on YouTube, in which he covers a wide range of topics including gold reserves and cryptocurrencies.