9 countries and IMF hold half of global gold reserves

Published on

Almost half of the global gold reserves are controlled by just 10 countries and institutions, according to a new study. The study reveals that the U.S. is far ahead of other countries in terms of gold reserves, even well above countries like Russia, whose central bank has been a buyer of gold for quite some time.

Get The Full Warren Buffett Series in PDF

Get the entire 10-part series on Warren Buffett in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues

Q1 2020 hedge fund letters, conferences and more

Half of global gold reserves held by just nine countries and the IMF

Buy Shares reports 49.37% of global gold reserves are held by nine countries and the International Monetary Fund. Total global gold reserves amount to about 1.85 billion ounces, and the top 10 countries and institutions are holding about 913.29 million ounces.

The U.S. is in first place with 286.87 million ounces, amounting to 15.5% of global gold reserves. Germany is in second place with 188.63 million ounces of the yellow metal, or 6.4% of the total supply.

The IMF is first among institutions holding gold, but looking at a picture of all countries and institutions, the IMF comes in third place behind the U.S. and Germany. The IMF holds 99.24 million ounces of the yellow metal, or about 5.3% of the global gold reserves.

The other top holders of gold in the world in order of the amount of gold reserves they hold are Italy, France, Russia, China, Switzerland, Japan and India.

Interestingly, gold isn't the top reserve metal, according to Buy Shares. That honor is reserved for lithium, and global reserves of lithium significantly outweigh global gold reserves. The firm said countries are holding 492.37 billion ounces of lithium in their reserves. Silver is in a distant second place with 19.3 billion ounces, while gold is in third place with 1.85 billion ounces.

Central banks to keep buying gold

Buy Shares said each country or institution's gold reserves are made up of gold held by a national government through its central bank or a financial institution. The reserves are a sort of guarantee for each of the countries in paying back their debt. The metal is also used to hedge against inflation, determine exports and imports and impact the valuation of each nation's currency.

The firm said not all central banks are net buyers of gold, although many are. Countries like Venezuela have actually been selling their gold reserves to support their struggling economies.

Justinas Baltrusaitis of Buy Shares expects central banks to keep buying gold as economic uncertainty remains high. The yellow metal has long been a safe heaven for investors during times of economic turmoil, which is why governments have been buying more.

China and Russia have been the top gold buyers among the ten biggest holders of global gold reserves. Baltrusaitis noted that the trade war and the coronavirus pandemic have been driving gold purchases, and he expects them to continue to do so.