Ever since the first time human beings laid eyes on gold, the gold market has been a cutthroat industry. It has been a mad race to increase gold ownership that has lasted thousands of years and does not look like it will stop any time soon.
These days, much of a country’s wealth is measured in the physical gold bullion it has in the vaults of its central bank. The yellow metal over which countless wars have been fought is still very much the cornerstone of our global economy.
With so much value being placed on this precious metal, you would assume a country’s gold reserves would be public knowledge, especially if that country happened to have the lion’s share of all the gold in the world, right?
The reality is not that simple though! Private gold ownership accounts for a huge percentage of the world’s gold, making any figures used to calculate ownership estimates at best.
However, after conducting extensive research into the gold mining industry, we have come up with who we think is the actual undisputed king of gold ownership on the plant.
Read on to find out which country has the largest gold reserves in the world!
How Much Gold Reserves Are in the World? Ask the World Gold Council!
In 2019, the World Gold Council published its findings regarding the total world gold reserves.
According to them, at that time, all the gold ever produced by different global mine production entities totaled about 190,040 metric tons.
However, there is a huge 20% disparity between their findings and figures produced by independent researchers.
One of the reasons for these different results is that the World Gold Council relies mostly on officially reported earnings rather than true data on the ground.
Unfortunately, not all the nations in question are honest about their gold holdings. In many cases, the value declared is often far less than the true size of gold reserves in the country, and here is why:
Political Reasons
A country can choose to lie about its gold holdings to gain a political advantage over other countries. This has been speculated before when discussing some of the world’s biggest investors in the gold industry.
In particular, Chinese gold production has always been under the microscope, with western countries, such as the US and the UK, claiming that the Chinese are not being forthright about their gold ownership.
However, such accusations are not only difficult to prove but have also been strongly denied by the Chinese government as Western propaganda.
In all likelihood, even if China were giving false data, the other countries are probably doing the same too!
Not All Gold Reserves Are Legal
One of the biggest issues the World Gold Council has had to deal with is that of illegally sourced gold.
A lot of the gold that is mined in conflict areas, such as warzones, somehow finds its way to the vaults of various central banks across the world.
Since this gold has been mined using unethical means, with many gross human rights violations taking place, it is never declared when it is brought into the country by unscrupulous gold buyers.
Some grim estimates seem to suggest that the highest gold reserves in the world are obtained in this way!
Protect a Source of Funding
In many cases, third-world countries and other regions facing financial crises rely upon funding from the World Bank and the International Monetary Fund.
However, this money is usually given on the understanding that the country is in dire need of it.
Therefore, these recipients of financial aid will go to great lengths to keep the true value of their gold reserves a secret. This makes it difficult to come up with any real estimate of the true value of gold owned around the world.
Currency Manipulation
Exchange-traded commodities, such as gold go a long way in determining the value of a country’s currency.
Typically, the more gold a nation has in its Central Bank, or Federal Reserve Bank, the stronger its currency is.
However, for reasons to do with international trade, a country may choose to downplay the amount of physical gold it has. A slightly weakened currency can boost the export industry by a huge margin.
Artisanal Mining Industry
It’s not only the largest gold mining corporations that are involved in the precious metals industry.
A significant portion of the world’s gold reserves is supplied by small artisanal miners, many of which either do not have accurate records or are involved in black-market precious metal deals.
Gold from such sources is hard to account for and is responsible for most countries having a lot more gold than they declare.
There Is Still More Gold in the World!
With such high figures of gold ownership being thrown about and the fact that a lot of the world’s private gold ownership is undeclared, it would be easy to assume we could wake up any day and find there is no more gold left in the world!
However, there are three important things about global gold reserves that you need to understand, which are:
Gold Is a Finite Resource
Yes, in all likelihood, gold will one day run out. Some experts have even gone so far as to suggest we only have a couple more decades of gold mining left before the earth’s reserves are depleted.
Whether this is true or not, gold mining activities have certainly increased, meaning we are removing more gold from the ground than ever before, so it stands to reason that it will, one day, all dry up.
No One Know How Much Gold Is Left
However, no one has ever been to accurately say how much gold is left in the world. For all we know, the biggest gold discovery is yet to be made. Meaning we could very well have enough gold for centuries to come.
More Gold Is Being Made
Every time the earth’s crust shifts, which is quite regular, hot gases are released from the crust and these are responsible for the formation of more gold.
While the rate of formation of gold is nowhere near the rate of mining activities, it is still something.
Why Do Central Banks Need Official Gold Holdings?
Banks across the world, such as the European Central Bank or the Bank of England need to have physical gold in their holdings for a variety of reasons, such as:
- To use it as collateral for market loans
- To deposit it so it can earn interest
- Adjusting the levels of the gold reserves
- To trade it for financial purposes
It is estimated that central banks own about 35,500 metric tons of gold, which is approximately a fifth of all the gold ever mined in the world.
The Biggest Gold Investors in the World
Who are the countries with the largest official gold holdings in the world? It’s no surprise that the USA is right on top, being the global powerhouse that it is.
However, keep in mind that this is the official list! We have our own ideas as to which country deserves that title.
USA: 8,133.47 Tons
Whichever method one may use to estimate gold reserves, the United States will always be a force to be reckoned with. It has a staggering 8,133.47 tons of gold locked up in Fort Knox!
To put this into perspective, it has more gold than the combined total of three of Europe’s largest gold holders, Germany, Italy, and France!
Most of this gold is held in many secure depositories across the country. In monetary terms, the US gold holdings are worth $712 billion!
Germany: 3,355.14 Tons
Although with less than half of the US treasure chest, Germany is in the second position, with a very healthy 3,355.14 tons of gold stocks in its coffers. These holdings have slightly decreased from their high of 3,359.09 in 2021, however, this is normal.
Unlike the US, Germany has a lot of its gold stored in various locations around the world. The reason for this was that during the cold war there was a lot of fear that German gold would fall into the hands of the Soviet Union.
As a result, much of their gold is stored in places such as the Bank of England in the UK and the Federal Reserve Bank in New York.
However, recently most of their gold has been returned to the country’s vaults in Frankfurt.
Italy: 2,451.84 Tons
With 2,451.84 tons of gold, Italy just manages to beat France to the third position. The unique thing about Italian gold is that it is not owned by the state, but by the Banca d’Italia.
It is kept in various locations, such as the Bank of England, the Federal Reserve Bank in New York, the Bank of Switzerland, and some secure vaults in Rome.
France: 2,436.50 Tons
The 1950s and 1960s were very profitable for France, during which time it managed to stockpile the majority of the 2.436,50 tons of gold in its vaults.
Most of the gold owned by France is kept in secure vaults under Banque de France in Paris. Their gold stocks have remained generally stable for most of the early 21st Century.
Russia: 2,298.53 Tons
Russian gold reserves have been bolstered over the years by the country’s drive to buy as much gold as they can, to the tune of $40 billion. It has thus managed to overtake China in the gold standings.
One thing Russia has in its favor is that it doesn’t only rely on gold imports, thanks to its huge billion-dollar mining industry.
However, political turmoil caused by the Russian invasion of Ukraine has caused sanctions to be placed on Russian gold.
This move has devalued the Russian gold market by a huge margin, with economic collapse now a real possibility.
China: 1,948.31 Tons
China accounts for 12% of the world’s gold production. It has a very wealthy and growing middle class, which has seen the local demand for gold rise significantly over the last few years. It comes in sixth on global standings, with an official stockpile of 1.948.31 tons.
China May Have More Gold Bullion Than We Think!
Despite what the records say, a lot of people around the world are convinced that China has the largest gold ownership in the world.
Looking at how many international gold mining companies around the world have Chinese ownership, it is easy to see why this might be the case.
However, the question is why, if China has more gold than even the US, it would be content to sit sixth on the global ranking? The answer may lie in the export industry, which is the backbone of the Chinese Economy.
If you take a look around your home, you will be surprised at how many products you have are manufactured in China!
Not only does the country manufacture clothes and electronics, but it has recently been making huge progress in the automotive industry as well!
One of the reasons for its popularity on the global market is that China has a weaker currency than most of the world’s bigger economies.
That makes it a favorable location for manufacturing industries, with easy access to labor as well.
To safeguard its export industry, Chine will forever keep its true gold reserves a secret from the outside world.
If you haven’t already, I strongly encourage you to check out starting a gold IRA. Your retirement income will be needed as you reach retirement age, and this is a way to diversify your portfolio.
Final Word
Regardless of how much gold is already in the hands of one country or another, you too can become a gold investor.
With so many countries doing all they can to own as much gold as possible, it is easy to see that this is a worthwhile investment.
If you want to protect your funds from inflation, consider becoming a gold investor today!
About Tim Schmidt
Tim Schmidt is an Entrepreneur who has covered retirement investing since 2012. He's also a published author, and his views on investing have been featured in USA Today, Tech Times, The Huffington Post, Nasdaq, and many more.
