The 13 Countries That Control the World's Gold

4) France holds 2,435.4 tonnes.

The French are the French and predicting what will happen with France’s gold reserves is difficult at best.  Someone has to bail out the PIIGS, and France is the second part of the foundation of the European Union and the Euro currency.  France is part of the Central Bank Gold Agreement that had led to selling, but this was all before the major run-up in gold.  The logic would seem to hold that more light selling would be expected.

5) China holds 1,054.1 tonnes… and probably now more.

China is adding to its gold reserves to the point that few question whether China’s gold hoard will move higher.  With more than 1.3 billion people and a fast-growing economy, it seems that the only thing that might impede gold buying is its own fight against inflation in 2011.  Some 454 tonnes of gold was bought between 2003 and  2009.  China probably added more than 200 tonnes during 2010 and “The World’s Growth Engine” is likely to keep adding gold to assure the value of the yuan.

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6) Switzerland holds 1,040.1 tonnes.

Imagining that the Swiss will buy more gold is hard after reports in recent years that it ran out of places to securely store it, even if those reports are debatable.  Then add in that Switzerland sold many tonnes of reserves under the time of the Central Bank Gold Agreement from 2003 to 2008, long before the great gold rush came upon us.   With a population of 7.6 million people, how much gold does the nation  need ?  Switzerland can still lighten its gold reserves and not be challenged over being one of the world’s international banking center and as a benchmark currency.

7) Russia holds 784.1 tonnes… and more.

Russia is gobbling up gold as its economic power grows.  The report from the World Gold Council showed that it had accumulated some 120 tonnes in just the first 10 months of 2010 after adding more than 100 tonnes in 2009 and close to 70 tonnes in 2007.  More gold was purchased in November of 2010 after the data cut-off. The Russians also have huge oil and commodity reserves.  Unless gold suddenly plummets to unexpected lows to the point where it has embarrassing losses, then it is easy to assume that Russia will keep increasing its gold reserves.

8 ) Japan holds 765.2 tonnes.

Japanese people are known for keeping cash under their mattresses, but maybe they also stash gold. Japan has an inflated currency and it may decide to unload some gold holdings to be more competitive economically.  The risk is a rather simple one, and that is the same as elsewhere: central banks have historically not been great interventionists when it comes to commodity prices.  Prices for Japanese goods are now too expensive for foreigners due to the strength of the yen.

9) The Netherlands holds 612.5 tonnes.

It was surprising to see that the Dutch were one of the top ten in nations when it comes to gold reserves, even if it used to hold more gold.  You rarely hear of a “Dutch-led bailout for the PIIGS” but anything is possible in theory.  The nation was a seller of gold from at least 2003 to 2008 under the Central Bank Gold Agreement in Europe.   The country’s gold holdings are unlikely to change much.

10) India holds 557.7 tonnes… and growing.

India is the second most populous country in the world with nearly 1.2 billion people.  Gold is such a part of the country’s culture that it’s impossible to think of India not accumulating more gold.  In fact, about one-third of the world’s jewelry demand comes from there.

India acquired 200 tonnes of the IMF gold sales in late-2010 at prevailing market prices.  Some may have considered this a peak of the trend, but India is likely to continue acquiring gold under a normalized scenario for 2011 and perhaps for the years ahead.

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