Who’s Got the Gold? Top 10 Gold Nations

Three European countries Switzerland, the Netherlands and Germany have been debating the wisdom of increasing their gold holdings and repatriating the portion that currently is stored in the United States and other countries.

Dutch Gold

The Dutch central bank – De Nederlandsche Bank –announced on November 20th that it moved a fifth of its total 612.5-metric-ton gold reserve from New York to Amsterdam. It was done quietly, if not secretly, an effort to redistribute the gold stock in “a more balanced way,” and to boost public confidence, the bank explained.

The Netherlands is the 10^th largest holder of gold. Dutch gold reserves are now stored as follows: 31 percent in Amsterdam, 31 percent in New York, 20 percent in Ottawa and 18 percent in London, England.

Save Our Swiss Gold

Unlike the Dutch step towards a larger control of gold, Switzerland overwhelmingly defeated a referendum held on November 29, 2014 that would have forced the Swiss National Bank to hold 20 per cent of its $538 billion total assets in gold and to repatriated 30 per cent of its gold now stored in Britain and Canada.

The “Save Our Swiss Gold” proposal was voted down by 77 percent to 23 percent, the government said yesterday. Polls had forecast the initiative’s rejection. The referendum question would also have pledged the Swiss National Bank never to sell its gold bullion.

SNB officials opposed the measure on the grounds that it makes it harder to keep prices stable and shield the central bank’s cap on the franc to 1.20 Swiss franc per euro.  Switzerland currently holds 1,040 tons of gold, or about 8 percent of its assets. The Swiss already have the world’s highest amount of bullion per capita.

Germany’s Gold

Germany tried and failed to adopt a similar path in early 2013 by announcing a plan to repatriate some of its gold reserves back from the US and France.

The efforts fizzled out the summer of 2014, Germany decided to leave $635 billion worth of gold in US vaults. Germany only keeps about a third of its gold at home. Forty-five percent is held in New York, 13 percent in London, 11 percent in Paris, and only 31 percent in the Bundesbank in Frankfurt.

Why the U.S. Became Custodian of the World’s Gold

Historically, the United States, specifically the Federal Reserve Bank of New York's underground vaults have stored the gold belonging to many European nations since the late 1930s and early 1940s when those nations feared their gold supply might be seized by invading Germany Armies during World War 2. After the end of World War 2, gold from West Germany was stored at the Federal Reserve Bank of New York during the cold when fear of a Soviet invasion led to their decision to move their gold reserves to a safer location.

The Brenton-Woods Agreement crafted in the post-WW2 era recognized the U.S. dollar backed by gold as the medium for international trade. However, by 1973, the United States detached the dollar from its gold underpinning and in the process also ended the price setting of gold at $35 per oz. The price of gold was left to be determined by market forces.

Gold’s Return as Monetary Anchor

According to international gold expert Koos Jansen central banks realized the importance of gold as an anchor in their paper-based monetary system. As a result of the financial meltdown in 2008, European central banks stopped selling gold. Meanwhile, Asian and South-American central banks increased gold purchases, and central banks around the world started to question the wisdom of storing gold abroad.

The implications are that these countries are fearful that the U.S. may be using the stored gold belonging to other nations to back up the U.S. dollar.

Jansen cites a letter from Edmund Moy, former Director of the United States Mint (Fort Knox), published June 13, 2014: ”Finally, more countries are repatriating their gold. For them, an audit is not enough. They would like their gold back. Azerbaijan, Ecuador, Iran, Libya, Mexico, Romania and Venezuela is a short list of countries that have requests into the custodians of their gold to transfer some or all their gold back to the home country.”

French Gold

Recently, some right-wing politicians in France have also joined the campaign to repatriate their gold. France is the fifth largest gold holder of gold. The leader of the far-right National Front party Marine Le Pen called the French central bank to repatriate the country’s gold reserves.

In an open letter to the governor of the Banque de France, Christian Noyer, Le Pen also demanded an audit of 2,435 tons of physical gold inventory.

With the issue raised of owns and who holds the world gold, www.mininglifeonline.net has compiled two tables based on information developed by the World Gold Council to identify the 10 ten gold holding nations, as well as the top 10 gold producing nations.

Top Gold Producing Nations

In 2013, Canada was ranked as the world’s 7^th largest gold producer behind China, Australia, U.S., Russia, Peru and South Africa. Canada produced 120 tonnes of gold in 2013 and continued an upward trend in gold production. Still Canada’s told pales in comparison to China the largest gold producer with 420 tonnes of gold in 2013. Australia was listed as the second highest gold producer in 2013 with 250 tonnes.

Gold Production by Nation 2011, 2012, 2013

Source: World Gold Council, 2014   (Measured in tonnes)

Top Gold Holding Nations

 When it came to gold holdings by Bank of Canada, Canada ranked 93^rd with 3 tonnes or 0.2 percent of reserves. The United States had the most gold with 8,133.5 tonnes followed by Germany with 3,384.2 tonnes. According to the World Gold Council, the United States holds around 25 percent of the more than 31,500 tonnes of gold currently held in national treasuries.

Gold Holdings 2013 Source: World Gold Council, 2014 (measured in tonnes)

For more information on who’s got the gold please visit the Discovery Channel Website