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The Countries with the Largest Gold Reserves

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Gold is considered a crucial element in diversifying a central bank’s foreign reserves because it bears little correlation with other assets, such as currencies and bonds. In times of market volatility, gold prices often move inversely to paper investments, providing balance to the portfolio.

As we’ve seen with the dollar, paper currency is subject to depreciation and inflation, while gold has maintained its value over the long term.

Top 5 Countries by Central Bank Gold Reserves

While many are monitoring the developments in BRICS, the United States continues to hold the largest stockpile of gold reserves in the world by a considerable margin.

In fact, the U.S. Treasury has almost as many reserves as the next three largest gold-holding countries combined, which are Germany, Italy and France. Russia rounds out the top five.

  1. United States – The US Treasury reports data about its gold holdings on a monthly basis which also includes how much gold is stored across various vault locations. According to the most recent Treasury data, roughly 147,341,858.382 fine troy ounces is in deep storage at the Fort Knox Bullion Depository, 54,067,331.379 troy ounces are held in vaults at West Point, 43,853,707.279 troy ounces in Denver, another 13,376,987.724 held in custody of the Federal Reserve in New York, plus an addition 2,783,218.656 in gold coins that is considered “working stock” that is spread across various locations. This amounts to 261423103.42 troy ounces, roughly 7411220.3158 kilograms. In terms of tonnage, the US holds roughly 7,411.22 tonnes of gold.
  2. Germany – Germany’s central bank, the Bundesbank, is integral to both the European System of Central Banks (ESCB) and the Eurosystem, which sets monetary policy for the Eurozone. Germany holds 3352.65 Tonnes of gold as of the third quarter of 2023.
  3. Italy – Headquartered in Rome, the Banca d’Italia is also part of the European System of Central Banks. The Bank of Italy’s main tasks today include maintaining financial stability, overseeing the banking system, managing the country’s gold and foreign reserves and contribute to the Eurosystem’s monetary policy. Italy holds 2452 tonnes of gold.
  4. France – Banque de France was established in 1800 by Napoleon Bonaparte. Today, it is also part of the ECB, but still maintains supervisory control over the French banking sector, maintaining financial stability, and providing various financial services, including managing the country’s gold and currency reserves. France holds 2437 tonnes of gold.
  5. Russia –  Central Bank of the Russian Federation has a wide variety of responsibilities with regard to managing monetary policy, and managing Russia’s foreign exchange reserves along with the national gold reserves. Russia holds 2333 tonnes of gold.
  6. China – The People’s Bank of China has been around since 1948 and is responsible for formulating and implementing monetary policy, maintaining financial stability, issuing the Renminbi (RMB) and managing the countries foreign currency and gold reserves. China holds 2192 tonnes of gold.

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Zimbabwe to Launch Gold-Backed Digital Currency

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central bank digital currency

Zimbabwe has had a long history of economic instability. From 2004 until 2009 the country experienced five years of hyperinflation.

During the period of hyperinflation the country had to halt the exchange of local currency to dollars due to a meteoric rise in prices.

In early 2009, the government had abandoned the local currency, instead favoring the US dollar for all official transactions.

By 2014, there were eight legal foreign currencies being used for day-to-day transactions throughout the country.

Almost ten years later, the economy is Zimbabwe is still in shambles. The Zimbabwe dollar was reintroduced in 2019. Periods of high inflation quickly followed.

In an attempt to curb inflation last year, government leaders began to issue gold coins to try to earn the trust of investors with a store of value.

The latest announcement from the African nation says that the central bank will begin to issue a digital token that is backed by gold.

The gold-backed digital is an attempt by the country’s central bank to provide a trusted hedge against the volatility of its local currency.

The country’s central bank reports holding just 350 kg of gold bars among its reserves and estimates that it will need $100 million dollars to support the digital gold token.

Royalties from the mining industry exceed $300 million dollars per year.

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Brazil & China to Start Trading in Renminbi, Japan Buys Russian Oil Above Price Caps

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The dollar is quickly losing ground in the global south as BRICS countries initiate trade deals in local currencies.

China and Brazil announced this week a new trade deal that will be settled in their own currencies. The news comes amid reports that the Chinese RMB has surpassed the Euro to become the currency with the second largest reserves held by Brazil.

Yet, the dollar still represents more than 80% of the countries foreign reserves.

The central bank report also shows that the value of Brazil’s international reserves lost over $37.5 billion in 2021 and 2022, due in large part to lower returns amid the US Federal Reserve’s rate hikes and dollar manipulation.

China has been Brazil’s largest trading partner, overtaking the United States in 2009. China has pledged to continue making significant investments in the largest economy in South America, with major spending across energy, mining, agriculture and information-and-communication technology.

As of February 2023, the Central Bank of Brazil reported gold holdings worth $7.602 billion, down slightly from $8.103 billion in March of 2022. It’s probable that some of the gold that China has been stockpiling was exchanged for yuan.

China continues pushing trade in the southern hemisphere moving bilateral trade agreements away from the dollar as part of the overall “One Belt One Road” initiative.

The Bank of International Settlements (BIS), the driving force pushing for global CBDC adoption and the organization that controls the SWIFT banking network lists gold bullion as a Tier 1 asset alongside United States Treasury Bills.

Rio-based Banco BOCOM BBM, a subsidiary of China’s fifth largest bank will be connected to the Cross-border Interbank Payment System (CIPS), bypassing the SWIFT network to support trade settlements directly in renminbi.

BRICS countries have been buying gold and stocking up their reserves in anticipation for more than a decade establishing stronger trade ties among the emerging economies. Over the last decade, Russia alone has quintupled their central bank gold holdings affirming its strong leadership role with the emerging Moscow World Standard for clearing commodities outside of Western manipulated markets.

Central Banks will continue to buy gold in large amounts to provide scaffolding for larger bilateral trade deals in local currency in preparation for the announcement of a BRICS basket currency that is expected to come during the BRICS Summit in South Africa in August of this year.

The price of gold has been trending higher this year as mainstream and retail investors continue to hedge riskier portfolio holdings due to tremendous uncertainty in the dollar’s global dominance.