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Top 10 countries with the largest gold reserves and Swedish gold reserves

Published by Karl Martin Karus in category Precious metals on 01.07.2020
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Top 10 countries with the largest gold reserves and Swedish gold reserves (part 1 of 2)

Have you ever wondered who has the largest gold reserves? Well, to answer that question let’s find out how much gold reserves exist. A total of 190 040 tons of gold exists above ground, as of 2017. (1)

Gold has long been viewed as the ultimate financial asset and has been widely used throughout the World as money.

The precious metal is useful and it is held by many central banks.  At times of economic crisis, gold provides stability and it is also a liquid asset that can be converted into cash.

Here are the top 10 countries that own the most gold, using the 2020 World Official Gold Holdings Chart.

  1. USA – 8133.5 tons

The USA has 8,133.5 tons of gold bullion. That’s nearly as much as Germany, the IMF, and Italy put together. Most of the gold is held in Fort Knox.

  1. Germany – 3366.5 tons

Germany is the second-largest hoarder of gold in the world with 3,366.5 tons of it.

  1. IMF (International Monetary Fund) – 2814 tons

The International Monetary Fund (IMF) is a group of 189 countries that work to foster global monetary co-operation. When it was founded in 1944 it was decided that 25% of initial quota subscriptions and subsequent quota increases were to be paid in gold. That remains the main source of the 2,814 tons of gold it holds. (6)

  1. Italy – 2451.8 tons

Italy holds just slightly more gold than France with 2,451.8 tons. Interestingly in Italy, the gold is owned by Banca d´Italia, not the state itself. Italy has faced huge economic disasters, but they refused to sell anything from their gold reserves. (5)

  1. France – 2436 tons

France has stockpiled 2,436 tons of gold, much of this reportedly acquired during the 1950s and 1960s. (3)

  1. Russia – 2271.2 tons

Russia can’t get enough of this precious metal and has increased its gold reserves by more than 400 tons in the past two years alone, allowing it to overtake China in the rankings. Interesting fact: Russia has a billion-dollar gold mining industry. (4)

  1. China – 1948.3 tons

China has 1,948.3 tons of gold in its reserves. It is also the world’s biggest gold producer, accounting for 12% of global mine production according to investment manager US Global Investors, Inc.

  1. Switzerland – 1040 tons

The gold stocks move into four figures now with Switzerland holding 1,040 tons. In 2014 there was a referendum to decide on whether the Swiss National Bank (SNB) should expand its gold reserves from 7% to 20%. The status quo prevailed and 78% of voters were against the SNB increasing its share. (7)

  1. Japan – 765.2 tons

Japan holds 765.2 tons of gold in stock, over 130 tons more than India. Geologist suggests that Japan hold a minimum amount of 150 tons of Gold. (8)

  1. India – 633.1 tons

Starting from 2018, India has increased its gold reserves more than 70 tons India is also very well known for its large weddings where gold is a must. (9)

Sweden has almost 126 tons of Gold in Gold Reserves. At the end of 2004, Sweden started reducing Gold reserves. They reduced gold reserves for almost 5 years in a row when the reserves decreased from approximately 185 tons to approximately 126 tons.

Top 10 countries with the largest gold reserves and Swedish gold reserves (part 2 of 2)

What are the status of gold reserves in Sweden and the perspective of gold?

The Riksbank has historically owned gold since it was one of its earlier obligations to be able to redeem banknotes and coins in exchange for gold! This service is now provided by bullion dealers like Tavex to the general public and not by the central bank anymore.

Nowadays, the Riksbank holds gold reserves to conduct its tasks to fund liquidity support or foreign exchange interventions. (10) As per the Riksbank, the main reason to hold a gold reserve is that the combined value of the gold and currency reserves is more stable than their respective values separately.

At the end of the year 2019, Sweden’s Central Bank- the Riksbank owned 125.7 tons of Gold valued at 57.5 Billion SEK at the time. The Riksbank stores its reserves in different geographies with the central banks to hedge against the security risk of having all of its gold in the same place. The gold owned by Riksbank is as stored as below:

As you can see in the chart below, almost half of the gold reserve is stored in the UK, at the Bank of England to allow for quick convertibility, if the need arises. As Sweden’s central bank, the Riksbank has unlimited scope for increasing the amount of Swedish Krona (SEK) (the same scope does not exist for foreign currencies) As per the Riksbank, it has a gold and currency reserve, primarily to keep inflation low and stable and promote financial stability.

As the banking sector has become large as a relation to the Swedish economy, a financial crisis could be very costly for Swedish companies and households. The reserves allow the Riksbank to intervene in times of crisis and offer loans in foreign currencies to mitigate the effects of the financial crisis and prevent it from spreading to the society, the Riksbank states.

The Riksbank has a regulatory framework for asset management: financial risk and investment policy and regulation thereof. The executive board sets the framework for the composition of gold and foreign currency reserves and risks thereof. You can read more about it here.

At the end of 2004, Sweden started reducing Gold reserves and has reduced gold reserves for almost 5 years in a row when the reserves decreased from approximately 185 tons to approximately 126 tons.

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  1. https://en.wikipedia.org/wiki/Gold#Price
  2. https://www.gold.org/goldhub/data/monthly-central-bank-statistics
  3. https://www.foreignaffairs.com/articles/france/1933-01-01/france-and-gold
  4. https://www.miningworld.ru/Articles/whats-the-state-of-russias-mining-industry-in
  5. https://www.bullionstar.com/blogs/ronan-manly/italys-gold-enters-the-political-fray-but-who-really-owns-it/
  6. https://www.imf.org/en/About/Factsheets/Sheets/2016/08/01/14/42/Gold-in-the-IMF
  7. https://www.bullionstar.com/gold-university/central-bank-gold-policies-swiss-national-bank
  8. https://web-japan.org/nipponia/nipponia45/en/feature/feature10.html
  9. https://tradingeconomics.com/india/gold-reserves

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