The United States has the most gold reserves in the world. According to a data analysis from tradingplatforms.com, the country holds 8,133.54 metric tons of this precious metal.
This stock is almost as much as the combined reserves of the next three major gold-holding countries. The latest data shows that the U.S. reserve is worth $11.041 billion.
What is interesting about this revelation is that the United States is not the largest producer of gold in the world. So how did he get here? Edith Reads is the financial expert at tradingplatforms.com and has studied global gold ownership trends.
She said: “The Bretton Woods agreement designated gold as the standard to which the dollar would peg its value. The other nations would then fix the value of their currency against the dollar.
“America offered to provide the rest of the countries with its dollars in exchange for storing their gold. At the height of the Bretton Woods system, America held up to 95% of the world’s gold reserves. -century later, it still holds most of these reserves.
Why do nations hold gold reserves?
Gold has been an essential medium of exchange for centuries. Many countries supported this when they started issuing their fiat currencies. They denominated their banknotes and coins in terms of gold, which served as the legal title to the actual gold.
Gold took on international importance with the creation of the Bretton Woods system. This system envisioned gold as a tool to promote an efficient exchange system, hence global economic development. Thus, countries felt it made political and economic sense to have their reserves of the commodity.
The perfect hedge against economic downturns?
Today, the gold standard is no longer a consideration for nations that issue their currencies. That said, many governments still maintain a measure of gold deposits. In fact, many continue to increase the amounts of their holdings.
The main reason behind this is that they see gold as a hedge against hyperinflation and other economic downturns. The raw material has proven to be resistant to political and economic shocks. Again, this is a vital asset in pulling countries out of liquidity shortages.
Who are the main gold holding countries in the world?
Germany holds the second largest gold reserves after the United States. Its roughly 3,359 metric tons of the precious metal is roughly half of US holdings. Italy comes far behind with deposits of around 2,451 tons. France and Russia complete the top 5 with respective reserves of 2,436 and 2,298 tonnes.
Despite being the largest gold producer in the world, China ranks sixth on the chart. Its 1,948.32 tons of gold represent less than a quarter of American holdings. Switzerland, Japan, India and Turkey complete the top 10. Despite having the largest gold mining reserves in the world, Australia does not make the top 20.