Central banks purchase gold for a number of reasons: to mitigate risk, to hedge against inflation and to promote economic stability. Increased concerns over another global financial crisis have as expected led central banks once again to build up their gold reserves.
Twenty-four percent of the WGC’s survey respondents indicated plans to grow their gold reserves, down just 1 percent from the previous year. Three percent reported their institution is planning to decrease its gold holdings, a break from the previous two years, when no respondents indicated such a move.
The WGC believes that central banks will continue to be net purchasers in 2024, “even if a third consecutive year of ~1,000t net purchases may be unlikely.”
8,133.46 MT
When it comes to the largest gold depository in the world, the American central bank is number one with 8,133.46 MT. The total value of the US central bank gold reserves is more than US$630 billion at a US$2,200 per ounce gold price.
The rest of US-owned reserves are held as working stock, which the country’s mint uses as raw material to mint congressionally authorized coins.
3,352.65 MT
The Bundesbank, Germany’s central bank, currently owns 3,352.65 MT of gold, which is less than half the amount amassed by the US. Like many of the central banks on this list, the German national bank stores over half of its stock in foreign locations in New York, London and France.
The Bundesbank’s foreign gold reserves came into question in 2012, when the German Federal Court of Auditors, the Bundesrechnungshof, was openly critical of the Bundesbank’s gold auditing.
In response, the German bank issued a public statement defending the security of foreign banks. Privately, the Bundesbank then began the arduous process of repatriating its gold stock back to German soil. By 2016, more than 583 MT had been transferred back to Germany.
Nearly half of Germany’s gold holdings are stored in Frankfurt, while more than a third are in New York, an eighth of its holdings are in London, and a miniscule amount are held in in Paris.
2,451.84 MT
Banca d’Italia, the national bank of Italy, began amassing its gold in 1893, when three separate financial institutions merged into one. From there, its 78 MT slowly grew into the 2,451.84 MT the country now owns.
Like Germany, Italy stores parts of its reserves offshore. In total, 141.2 MT are located in the UK, 149.3 are in Switzerland and 1,061 are kept in the US Federal Reserve. Italy houses 1,100 MT of gold domestically.
2,436.97 MT
The Banque de France keeps all 2,436.97 MT of its gold reserves on hand. The precious metal is stored in the bank’s secure underground vault, dubbed La Souterraine; it is located 27 meters below street level.
La Souterraine’s gold vaults are one of the four designated gold depositories of the International Monetary Fund.
2,332.74 MT
The Bank of Russia is the official central bank of the Russian Federation and owns 2,332.74 MT of gold. Like France, Russia’s central bank has opted to store all its physical gold domestically. The Bank of Russia stores two-thirds of its gold reserves in a bank building in Moscow, and the remaining one-third in Saint Petersburg.
The majority of the yellow metal is in the form of large, variable-weight standard gold bars weighing between 10 and 14 kilograms. There are also smaller bars on site weighing as much as 1 kilogram each.
2,262.39 MT
The central bank for Mainland China is the People’s Bank of China (PBoC), located in Beijing. The national financial institute stores 2,262.39 MT of gold, most which has been purchased since 2000. In 2001, the PBoC had 400 MT of gold in reserve, but in just a little more than two decades that total has climbed by 459 percent.
The PBoC issues the Panda gold coin, which was first created in 1982. The Panda coin is now one of the top five bullion coins issued by a central bank. It is among the ranks of the American Eagle, Canadian Maple Leaf, South African Krugerrand and Australian Gold Nugget.
1,040 MT
Holding the seventh largest central bank gold reserves is the Swiss National Bank. Its 1,040 MT of gold are owned by the state of Switzerland, but the central bank manages and maintains the reserve.
After years of opaqueness regarding the country’s golden treasure trove, the Swiss Gold Initiative, or Save our Swiss Gold campaign, was launched in 2011.
The publicity culminated in a national referendum in 2014, asking citizens to vote on three proposals. The first was a mandate for all reserve gold to be held physically in Switzerland. The other two dealt with the central bank’s ability to sell its gold reserves, along with a decree that 20 percent of the Swiss bank’s assets be held in gold.
845.97 MT
822.58 MT
The Reserve Bank of India is another central bank that has fervently acted to increase to its holdings in recent years. It began adding to its gold assets in 2017; however, the majority of its purchases have taken place in the past four years.
While more than half of its gold is held overseas in safe custody with the Bank of England and the Bank of International Settlements, about a third of its gold is held domestically.
612.45 MT
Rounding out this list of the top central bank gold reserves is the Dutch National Bank (DNB), the central bank of the Netherlands. Like Switzerland, the Dutch central bank stores as much as 38 percent of its gold in Canada’s national reserve. Another 31 percent, in the form of 15,000 gold bars, is held in a domestic vault, while the remaining 31 percent is located in New York’s Federal Reserve bank.
2,814.1 MT
Since 1944, the International Monetary Fund has added gold through the repayment of debts owed by member countries. Nations can also exchange gold for another member country’s currency.
This is an updated version of an article first published by the Investing News Network in 2020.
Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
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