The world’s biggest gold bugs

Gold just experienced its first annual price decline in 13 years, wrapping up its worst year since 1981.

This is bad news for central banks that have been diversifying their foreign reserves to include gold, albeit at a slower pace than in 2012.

A new report from the World Gold Council showed that year-to-date central bank gold reserves increased by nearly 300 tonnes. Global official gold holdings totaled 31,913.5 tonnes as of December 2013, according to the latest report from the World Gold Council.

Business Insider pulled the numbers on the 10 biggest official reserves.

No. 10: India

Official gold holdings: 557.7 tonnes

Percent of foreign reserves in gold: 8.4 percent

India’s government has been trying to deter people from purchasing the precious metal and some market watchers, such as Jim Rogers, attribute gold’s price decline to lower demand from emerging markets. Gold imports have been blamed for the nation’s high current account deficit. India’s central bank governor Raghuram Rajan has previously said the country can pay off its debt in gold.

No. 9: Netherlands

Official gold holdings: 612.5 tonnes

Percent of foreign reserves in gold: 54.0 percent

A large portion of the Netherlands’ gold reserves are held in the U.S., and some are held in Canada and the U.K. About 10 percent is expected to be held in Amsterdam. Early in 2013 the Netherlands announced intentions to repatriate its gold.

No. 8: Japan

Official gold holdings: 765.2 tonnes

Percent of foreign reserves in gold: 2.6 percent

Japan’s gold reserves were at just 6 tonnes in 1950, and its central bank registered its first serious jump in gold holdings in 1959, with purchases increasing by 169 tonnes from the previous year.

In 2011, the Bank of Japan sold gold to pump ¥20 trillion into the economy to calm investors after the tsunami and resulting Fukushima nuclear disaster.

No. 7: Russia

Official gold holdings: 1,015.1 tonnes

Percent of foreign reserves in gold: 8.3 percent

Russia’s central bank gold holdings crossed the 1,000 tonne mark for the first time in the third quarter of 2013.

No. 6: Switzerland

Official gold holdings: 1,040.1 tonnes

Percent of foreign reserves in gold: 8.3 percent

In 1997, Switzerland announced proposals to sell a portion of the country’s gold reserves because they were no longer considered to be “necessary for monetary policy purposes,” according to the World Gold Council.

In May 2000 the country began selling 1,300 tonnes of what it considered to be surplus gold. Under the first Central Bank Gold Agreement, 1,170 tonnes were sold, and 130 tonnes were sold under CBGA2. Switzerland has announced no plans to sell gold under CBGA 3.

Note: The first Central Bank Gold Agreement (CBGA 1) ran from Sept. 27, 1999 to Sept. 26, 2004. CBGA 2 ran from Sept. 27, 2004 to Sept. 26, 2009, and CBGA 3 will run for five years from Sept. 2009.

No. 5: China

Official gold holdings: 1,054.1 tonnes

Percent of foreign reserves in gold: 1.2 percent

Gold still accounts for a very small percentage of China’s $3.7 trillion in foreign exchange reserves, compared with the international average of 10 percent. Building up gold reserves will be crucial to China as it moves to internationalize its currency, with hopes to make it a reserve currency, according to the according to The Financial Times.

No. 4: France

Official gold holdings: 2,435.4 tonnes

Percent of foreign reserves in gold: 66.1 percent

France sold 572 tonnes of gold under CBGA 2, and outside of the agreement France transferred about 17 tonnes to the Bank for International Settlements in late 2004 as part of a purchase of BIS shares. France announced no plans for sales of gold reserves under CBGA 3.

Bank of France has said it won’t sell gold reserves because it provides confidence and diversification and can absorb volatility in its balance sheet, Reuters reported.

No. 3: Italy

Official gold holdings: 2,451.8 tonnes

Percent of foreign reserves in gold: 67.2 percent

Italy sold no gold under CBGA 1 or 2 and has announced no sales under CBGA3. But in 2011, Italian banks were looking to the Bank of Italy to buy gold and bolster their balance sheets ahead of stress tests.

No. 2: Germany

Official gold holdings: 3,387.1 tonnes

Percent of foreign reserves in gold: 68.7 percent

Germany reduced its gold holdings in October. The Bunesbank sells six to seven tonnes to the finance ministry every year. Germany sold gold under CBGA 1 and 2 for the purposes of minting commemorative gold coins. In the first year of CBGA 3 (2008-2009), the Bundesbank sold approximately 6 tonnes, and it has sold 4.7 tonnes of gold since Sept. 7, 2011.

No. 1: United States

Official gold holdings: 8,133.5 tonnes

Percent of foreign reserves in gold: 71.7 percent

The United States had its largest gold reserves in volume terms in 1952, when reserves totaled 20,663 tonnes. Holdings first fell below the 10,000 mark in 1968.


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