“Have you heard about the Golden Rule? Whoever has the gold, makes the rules.” It’s an old quip, to be sure, but the countries with the largest gold reserves are indeed abiding by their own rules in a time when few countries are still on the gold standard.

Governments and central banks stockpile gold for a number of reasons. Perhaps they don’t fully trust the currency, or maybe they’re bracing for economic turmoil. After all, gold has a decent track record of maintaining its value during times of high inflation.

Gold doesn’t carry counterparty risk (the possibility that the other party in a transaction may not meet their obligations) as currency and bonds do. Also, gold can help to diversify a nation’s wealth reserves.

Whatever the reasons may be, some nations have amassed mighty hoards of the precious yellow metal.

If the gold price rises significantly over the coming months and years, the balance of economic power could shift dramatically. Hence, there’s really nothing shocking about countries storing gold, but the amounts – and which nations are atop the list of gold holders – may surprise you.

1. The United States

Ironically enough, the nation that ended its gold standard in 1934 currently holds first place among the countries with the largest gold reserves. According to the World Gold Council, the U.S. central bank had 8,133 tonnes (sometimes also known as metric tons) of gold as of July 28, 2022[1]. The gold is held at various locations, including Fort Knox, Kentucky; West Point, New York; and Denver, Colorado[2].

Central banks often hold a nation’s gold. In the U.S., however, the gold is held by the Treasury in custody for the Mint, not by the Federal Reserve.

2-4: Germany, Italy, France

Europe is low on certain commodities, including oil and natural gas, as the Russia-Ukraine crisis and its resultant sanctions have reduced inflows dramatically. Certain E.U. nations aren’t short on supply of one particular commodity, and of course, that’s gold.

Germany takes second place among gold hoarding nations with 3,355 tonnes, while Italy and France are nearly equal with 2,452 and 2,437 tonnes, respectively.

Even before the Russia-Ukraine crisis and sanctions, however, the E.U. was already eager to shore up its gold supply. In 2021, after two decades of gold accumulation in the E.U., the European Central Bank declared that gold was “an important element of global monetary reserves, as it continues to provide asset diversification benefits.”

Today, there’s little doubt that Germany’s Bundesbank, Italy’s Banca d’Italia, and France’s Banque de France remain staunchly bullish on gold as a reliable store of wealth.

5: Russian Federation

The Russian Federation’s 2,299 tonnes of gold puts the country in the top five global gold holders. This is an interesting case, as Russia had reportedly been shoring up its gold reserves for years prior to its invasion of Ukraine.

Russia’s gold, which is stored in vaults located in Moscow and elsewhere in the country, was worth around $140 billion during the early stages of the Ukraine invasion. It might be speculated that Russia had built up its gold supply years in advance, in anticipation of the invasion of Ukraine. The idea, apparently, would be to insulate Russia from the impact of sanctions that would diminish the value or usability of the ruble.

Then there’s the question of how Russia could sell its gold if it wished to do so. It’s been speculated that, even as some nations impose sanctions on Russian gold, the country could still sell its gold to China, India, and/or Kazakhstan.

6. China

China might not have made the top five on this list, but the nation’s 1,948 tonnes of gold is nothing to sneeze at. It’s one of only two east Asian countries on the list of countries with the largest gold reserves. However, it’s difficult to substantiate China’s exact place on this list as the country doesn’t necessarily have a perfect track record when it comes to transparency in releasing economic statistics.

Still, it’s not unreasonable to surmise that China does, indeed, have a whole lot of gold stored up. One commentator has even gone so far as to suggest that China actually has more gold than the U.S. – around 20,000 tonnes is the estimate – an interesting possibility to consider, but difficult to prove.

Why would China choose to hoard so much gold? One reason might be the country’s evident desire to “de-dollarize,” or reduce its dependence on the world’s most commonly used reserve currency, the U.S. dollar. Both China and Russia may have ramped up their gold storage over a number of years in order to de-dollarize.

Also, just as Russia has invaded Ukraine, there are concerns that China may follow suit and invade Taiwan. If so, then China’s years-long accumulation of gold might have had a specific and controversial purpose all along.

7. Switzerland

Switzerland’s love of gold is no secret, and the Swiss National Bank’s hoard of 1,040 tonnes solidifies the nation’s spot as a top-ten gold holder. Switzerland is widely believed to have the world’s largest per capita gold reserve.

There was even some controversy this year, as Switzerland reportedly imported gold from Russia in May.

Russia is a large-scale bullion producer while Switzerland is the world’s biggest refining and transit center for gold. Customs data indicates that in May, Switzerland received a whopping 3.1 tonnes of gold, valued at approximately $200 million, from Russia.

According to the Federal Office for Customs and Border Security, the “import of gold from Russia into Switzerland is not prohibited by the Ordinance on Measures Relating to the Situation in Ukraine.” On the other hand, the “export of gold to Russia is prohibited by the existing sanctions regime.” So, there may be debate over whether Switzerland’s purchase of gold from Russia violates the terms and/or spirit of European sanctions on Russia.

8. Japan

Finally, we can round out our list of top global gold accumulators with the Bank of Japan, holder of 846 tonnes of gold. After Japan, the next biggest gold holders are India, the Netherlands, Turkey, Taiwan, and Kazakhstan.

2022 has been an interesting year for gold in Japan, to say the least. The metal’s price in Japan hit an all-time high in February, possibly driven by geopolitical risk along with concerns over a weakening Japanese yen.

Then, in June, Japan joined the U.S., Britain, and Canada in banning Russian gold exports. This joint action would “directly hit Russian oligarchs and strike at the heart of (President Vladimir) Putin’s war machine,” according to British Prime Minister Boris Johnson.

Is Holding Gold an Advantage?

Gold holdings can be advantageous. Gold is widely seen as a hedge against inflation and fluctuating currency exchange rates, and it’s widely sought as a way to diversify national assets.

Holding gold also has disadvantages. Gold reserves do not earn interest, so moving resources into gold can deprive a country of interest income.

The countries with the largest gold reserves are not necessarily stronger or weaker than other nations. They may just have different priorities and choose to hold their wealth in different ways!

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