The global central banks have been turning into keen gold buyers for the last 10 years. In 2018, gold purchases by central banks increased by 36% compared to 2017. This means that the central banks of the world now hold about 366 tons of the precious metal.
However, not every central bank has jumped on the bandwagon. Take socialistic Venezuela, a country in turmoil and in the middle of an economic breakdown, which has sold nearly twenty-five tons of the yellow metal to date to support its failing economy.
But Venezuela is the rare exception. The majority of central banks are quite enthusiastic to grow their gold reserves as a shield against economic unpredictability. Two of the largest central banks, Russia and China, are selling their United States Treasury Securities and buying gold in reaction to US economic sanctions and tariffs.
Here are the Top 5:
The United States
At 8,133.5 tons, the US Federal Reserve currently holds the largest gold reserve in the world. But the Federal Reserve hasn’t been buying gold as actively as other countries. Their reluctance to buy gold is to keep the US Dollar from depreciating.
The central bank of Germany has repatriated nearly 674 tons of gold from the Federal Reserve Bank and the Banque de France. Germany’s proximity with then Russia-controlled East Germany during the Cold War forced the country to store its gold with other nations. By 2020, the Deutsche Bundesbank is expected to call-in all of its gold back to the motherland. With 3,370 tons of gold, Germany has the second largest gold reserves in the world.
The country has 2,451.8 tons of gold and no plans to part with it any time soon. According to the Bank of Italy, the country considers gold a very safe investment and protection against the instability of the US dollar. Italy has been struggling financially lately because of bad politics so holding gold is more favorable than the Euro or other fiat currencies. Other EU countries, like Spain and Portugal, have also been struggling for years. The mechanics of a common European currency is hurting these countries’ economies, so they are not able to substantially add to their gold reserves.
France also stopped selling its gold reserves and now has about 2,436 tons of gold, making it the 4th largest gold reserve in the world. The leader of the National Front Party in France, Marine Le Pen, wants to put a freeze on the sale of gold. She has advocated repatriation of all of the country’s gold that’s being held by other countries. France is another country being hurt by the common EU Currency.
Due to the economic sanctions the US has placed on the country, the Russian Central Bank has been making heavy gold purchases for the last 6 years. In 2017, the country bought 224 tons of gold and has sold most of its US Treasury Securities.
Russia currently holds 2,119.2 tons of gold and is actively trying to buy more. They are buying gold in an attempt to devalue the US dollar in retaliation for the sanctions and as a safeguard against having its assets frozen in US banking system.
This article contains the author's opinions. These are not investment-related recommendations. Do not consider the article as any type of commercial solicitation or an investment product offer.
About the Company
ELY GOLD ROYALTIES INC.(TSXV: ELY; OTCQB:ELGYF) is a Vancouver-based emerging royalty company with assets focused in Nevada and the Western US. Its current portfolio includes 33 Deeded Royalties and 21 Properties being sold to retain royalties. Their portfolio includes three producing royalties and is currently generating significant revenue.
Ely Gold’s royalty portfolio includes producing royalties, fully permitted mines, mines under construction and development projects that are being permitted for mine construction.