Which countries have the largest gold reserves

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Which countries have the largest gold reserves
Which countries have the largest gold reserves © Mario Tama / Staff Getty Images Sport

Usually the reserve is gold because gold has a high value for its small size and is a non-perishable material, but above all because it is universally accepted. Furthermore, it can be easily transformed into coins; in the past, coins could be directly minted from gold reserves.

The reserve metal can be directly used to mint coins, which thus take on an intrinsic and tangible value, or be stored in ingots in the Central Bank vaults. In both cases it is difficult to verify the consistency and purity of the metal.

In general, the reserve must be an asset of equal value to the currency that is printed. If the value of the reserve is only a percentage of the currency issued, devaluation occurs, which constitutes a profit for the issuer.

Devaluation is a transfer of wealth from users to the issuer of money. In general, the reserve can be made up of any metal: for example, John Kennedy, through Executive Order 11110 signed on June 4, 1963, authorized the minting of coins backed by silver.

Which countries have the largest gold reserves

Once the metal in each currency is known, the weight of the metal issued per unit of monetary base can be calculated and a favorable exchange rate can be attributed to the currencies issued against a greater reserve, rewarding the coins that have used the inflationary lever the least.

If the reserve is held and not used directly in the coins, you must still rely on the reserve data published by the issuing institution. A legal separation between the owner of the deposit where the law requires the metal reserves to be kept and the issuer of money could avoid a clear conflict of interest.

Inventories are an important asset item on the balance sheet and their valuation is critical for many balance sheets. Another critical aspect is whether the gold reserves are the property of the Central Banks or of the State, which entrusts them to be managed on behalf of third parties, to the Central Bank.

The effect of this problem would be that, in the case of state ownership, the presence of gold reserves would have to be a quantified item among the revenues of the state budget. But which are the countries with the largest gold reserves in the world? The USA leads the top 10, followed by Germany, the International Monetary Fund, Italy, France, China, Russia, Switzerland, Japan and the Netherlands.