Gold reserve

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A gold reserve is the gold held by a central bank or nation 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
World Gold Reserves from 1845 to 2013, in metric tons

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 June 2013 (Top 40 based on World Gold Council data)[10]
RankCountry/OrganizationGold
(tonnes)
Gold's share
of national
forex reserves (%)
-G6 (EU)8,972.676%
1 United States8,133.570%
2 Germany3,390.666%
3International Monetary Fund logo.svg International Monetary Fund2,814.0N.A.
4 Italy2,451.865%
5 France2,435.465%
6 China1,054.11%
7  Switzerland1,040.18%
8 Russia1,015.4[11]
9 Japan765.22%
10 Netherlands612.552%
11 India557.77%
12Logo European Central Bank.svg European Central Bank502.127%
13 Turkey487.3[12]16.2%
14 Taiwan423.64%
15 Portugal382.584.0%
16 Venezuela365.866.0%
17 Saudi Arabia322.92%
18 United Kingdom310.312%
19 Lebanon286.822%
20 Spain281.623%
21 Austria280.048%
22 Belgium227.433%
23 Philippines192.79%
24 Algeria173.63%
25 Thailand152.43%
26 Kazakhstan130.919%
27 Singapore127.42%
28 Sweden125.77%
29 South Africa125.110%
30 Mexico124.93%
31 Libya116.64%
32BIS-logo.PNG Bank for International Settlements115.0N.A.
33 Greece112.076%
34 South Korea104.41%
35 Romania103.79%
36 Poland102.94%
37 Australia79.96%
38 Kuwait79.09%
39 Indonesia75.93%
40 Egypt75.621%
41Brazil Federative Republic of Brazil67.01.0%
42Denmark Kingdom of Denmark66.53.5%
43Pakistan Islamic Republic of Pakistan64.427.4%
44Argentina Argentine Republic61.77.2%
45Belarus Republic of Belarus49.424.5%
46Finland Republic of Finland49.121.3%
47Bolivia Plurinational State of Bolivia42.313.6%
48Bulgaria Republic of Bulgaria40.09.3%
49West African Economic and Monetary Union36.512.0%
50Malaysia Malaysia36.41.2%
51Ukraine Ukraine36.46.7%
52Peru Republic of Peru34.72.3%
53Slovakia Slovakia31.864.7%
54Nepal Nepal30.122.9%
55Iraq Republic of Iraq29.82.0%
56Ecuador Republic of Ecuador26.328.1%
57Syria Syrian Arab Republic25.86.5%
58Morocco Kingdom of Morocco22.05.7%
59Afghanistan Islamic Republic of Afghanistan21.913.8%
60Nigeria Federal Republic of Nigeria21.42.0%
61Sri Lanka Democratic Socialist Republic of Sri Lanka16.611.2%
62Serbia Republic of Serbia16.64.8%
63Jordan Hashemite Kingdom of Jordan14.25.5%
64Cyprus Republic of Cyprus13.965.8%
65Bangladesh People's Republic of Bangladesh13.54.2%
66Cambodia Kingdom of Cambodia12.411.1%
67Qatar State of Qatar12.41.4%
68Czech Republic Czech Republic11.01.1%
69Colombia Republic of Colombia10.41.2%
70Laos Lao People's Democratic Republic8.934.4%
71Ghana Republic of Ghana8.77.1%
72Paraguay Republic of Paraguay8.76.2%
73Latvia Republic of Latvia7.74.6%
74Myanmar Republic of the Union of Myanmar7.34.4%
75El Salvador Republic of El Salvador7.310.6%
76Guatemala Republic of Guatemala6.94.3%
77Republic of Macedonia Republic of Macedonia6.811.1%
78Tunisia Tunisian Republic6.74.4%
79Tajikistan Republic of Tajikistan6.451.1%
80Azerbaijan Republic of Azerbaijan6.02.0%
81Republic of Ireland Ireland6.016.6%
82Lithuania Republic of Lithuania5.83.5%
83Mongolia Mongolia5.87.4%
84Bahrain Kingdom of Bahrain4.73.7%
85Brunei Nation of Brunei, the Abode of Peace4.04.9%
86Mauritius Republic of Mauritius3.95.2%
87Mozambique Republic of Mozambique3.76.6%
88Kyrgyzstan Kyrgyz Republic3.37.1%
89Canada Canada3.20.2%
90Slovenia Republic of Slovenia3.218.5%
91Aruba Aruba3.118.5%
92Hungary Hungary3.10.3%
93Bosnia and Herzegovina Bosnia and Herzegovina3.03.1%
94Luxembourg Grand Duchy of Luxembourg2.210.7%
95Hong Kong Hong Kong Special Administrative Region2.10.0%
96Iceland Republic of Iceland2.02.2%
97Papua New Guinea Independent State of Papua New Guinea2.02.3%
98Trinidad and Tobago Republic of Trinidad and Tobago1.90.9%
99Albania Republic of Albania1.62.8%
100Yemen Republic of Yemen1.61.2%
Sum31,868.8

Privately held gold[edit]

As of October 2009, gold exchange-traded funds held 1,750 tonnes of gold for private and institutional investors.[13]

Privately held gold (May 2011)[14]
RankNameTypeGold (Tonnes)
1SPDR Gold SharesETF1,239
2ETF Securities Gold FundsETF259.79
3ZKB Physical GoldETF195.53
4COMEX Gold TrustETF137.61
5Julius Baer Physical Gold FundETF93.50
6Central Fund of CanadaCEF52.71[15]
7NewGold ETFETF47.75
8Sprott Physical Gold TrustCEF32.27
9ETFS Physical Swiss Gold SharesETF27.97
10BullionvaultBailment37.1[16]
11Central GoldTrustCEF18.81[17]
12GoldMoneyBailment19.55[18]

World gold holdings[edit]

World gold holdings (2008) (Source: World Gold Council)[19]
HoldingPercentage
Jewellery52%
Central banks18%
Investment (bars, coins)16%
Industrial12%
Unaccounted2%

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 Q2 2013", "Top 40 reported official gold holdings" is on page 15 of the pdf file.
  11. ^ as of August 2013, according to the IMF
  12. ^ as of August 2013, according to the IMF
  13. ^ [1]
  14. ^ "FACTBOX-Precious metals holdings of exchange-traded products | News by Country | Reuters". Af.reuters.com. 2011-06-06. Retrieved 2012-01-08. 
  15. ^ "Central Fund's Net Asset Value". Centralfund.com. 2000-03-16. Retrieved 2012-01-08. 
  16. ^ "Daily Audit - Allocated Gold Bar Lists and Bank Statements". BullionVault.com. 2011-12-21. Retrieved 2012-01-08. 
  17. ^ "GoldTrust's Net Asset Value". Gold-trust.com. 2000-03-16. Retrieved 2012-01-08. 
  18. ^ "Total Gold, Silver, Platinum, Palladium and Currencies in GoldMoney". Goldmoney.com. 2011-12-30. Retrieved 2012-01-08. 
  19. ^ "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.