In 2024, the price of gold skyrocketed nearly 20 percent owing to increased central bank purchases, high demand from buyers, and shifting to safe-haven assets amidst global uncertainties. Most of the countries in the world have their gold with central banks as reserves. 

Global central banks had added a whopping 206% monthly rise recently recorded since January 2024, with 37 tonnes of gold added to their reserves, according to the International Monetary Fund (IMF).

Total gold purchases in H1 2024 were 5% more than those in H1 2023, said the World Gold Council, presenting all the gaps that the growth rate cools down during Q2.

Gold reserves are a base upon which a nation stands that may better the credit rating of the country and ratify it in the modern world of trade and finance. The World Gold Council lists the following as the top 10 countries by gold reserves in Q2, 2024:

Rank	Country	Gold Reserves Tonnes	Holdings
1	United States of America	8,133.46	72.41%
2	Germany	3,351.53	71.46%
3	Italy	2,451.84	68.33%
4	France	2,436.97	69.99%
5	Russian Federation	2,335.85	29.47%
6	China	2,264.32	4.91%
7	Japan	845.97	5.15%
8	India	840.76	9.57%
9	Netherlands	612.45	61.61%
10	Turkey	584.93	34.06%

Why Do Countries Maintain Gold Reserves?

• Gold is a stable store of value that boosts confidence in a country’s economic stability.

• It helps maintain currency stability, even though the gold standard is no longer in use.

• Holding gold diversifies a country’s reserves, reducing risks from other assets.

• Gold’s value often rises when the US dollar falls, protecting reserves during market volatility.

• Countries use gold in international trade, enhancing creditworthiness and global standing.

• Gold acts as a hedge against crises, inflation, and currency devaluation.

India’s Position in Global Gold Reserves

Gold plays a significant role in India’s culture, symbolising wealth, status, and a store of value. It is also central to various rituals.

The Reserve Bank of India (RBI) governs the country’s gold reserves and has been continually increasing them throughout 2024. As per World Gold Council, the net gold purchases of RBI for this year have already gone to 37 tonnes from 33 tonnes in 2022 and 16 tonnes in 2023.

India, a major gold market, is witnessing increasing demand due to the increased affluence. The country is ranked eighth in the world and has 840.76 metric tonnes of gold reserves.

Some Frequently Asked Questions (FAQs)

Which countries have the most gold reserves?

The top three countries are the United States, Germany, and Italy. The U.S. has almost as much gold as Germany, Italy, France put together.

Where does India rank in gold reserves?

India ranks 8th globally, with its gold reserves playing a crucial role in economic stability and cultural significance.

Why do countries hold gold reserves?

Gold ensures economic stability, diversifies reserves, protects against currency risks, and enhances creditworthiness in global trade.

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