Many of us might have heard or read about tonnes of gold reserves being kept by a lot of countries around the world, including India. The yellow metal is not only popular for its cultural and monetary value, but it also plays a key role in countries’ economies too.
While we get back to that role later in this article, let us first get to know which countries have the largest gold reserves in the world, as per a recently revealed list by Forbes.
Forbes List Of 10 Countries With Highest Gold Reserves
According to estimates by the World Gold Council, here are the current rankings of countries with the highest gold reserves in December quarter of 2023.
1.USA- 8,133.46 Tonnes
|Rank & Country
|Gold Reserve (Tonnes)
|Gold Reserve Holdings ($ Millions)
Why Do Countries Keep Gold Reserves?
Many countries around the world maintain gold reserves for not one but multiple reasons.
Firstly, gold is regarded as a trustworthy and steady store of value. Countries can boost confidence in their economic stability, particularly in times of financial uncertainty, by hoarding gold. Secondly, gold has always helped to maintain the value of a nation’s currency. Some nations continue to see gold reserves as a way to preserve currency stability, even though the gold standard is no longer widely applied.
Third reason is diversification. Gold is a physical asset that nations can hold in reserve to diversify their overall portfolio. Because of this diversification, the risks brought on by changes in the value of other assets are reduced.
Last but not the least, gold’s inverse relationship with the US dollar adds to the reasons why the yellow metal is kept among reserves by countries. Gold typically appreciates in value as the US dollar depreciates.
Because of this dynamic, central banks (such as India’s RBI) are able to protect their reserves in times of market turbulence. International trade and finance also involve gold reserves. Gold is sometimes used by nations to make up for trade imbalances or as loan collateral. Gold reserves have the potential to improve a nation’s creditworthiness and position within the international financial system. Gold also acts as a hedge in times of crisis. It provides protection from inflation and currency devaluation and frequently increases in value during economic downturns and geopolitical unrest.
source by: India Times News
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