Who Owns Gold - Commodities Market Overview

  June 10, 2016

Many believe that Russian President Putin is trying to distance his country from its reliance on the U.S. dollar, which is the primary currency used to trade oil and other major commodities worldwide.

Over the past five years, Russia has been increasing its stockpile of gold bullion significantly, to over a value of $44 billion.

There have been instances when countries have imposed exchange controls or a freeze on assets, such as on foreign securities. Gold provides the essential liquidity in these circumstances. Thus central banks from around the world accumulate and hold gold to afford such benefits.

For thousands of years, gold has been one of the most sought after metals in the world. It was first used as jewelry as early as 2600 BC in ancient Mesopotamia, what today is Iraq. Gold was introduced to dentistry in 600 BC, and has since then been introduced to various other applications. Several industries such as electronics, food, medical, and manufacturing all utilize gold in some fashion. Most notably, gold plays a significant role in the international monetary markets, where countries worldwide hold gold as a reserve. Holding gold as a reserve provides diversification among assets, economic security, and liquidity.

Gold is a unique asset in that it is no one else’s liability and, is not directly influenced by the economic policies of any individual country. Its status cannot, therefore, be undermined by inflation in a reserve currency country.

According to the World Gold Council, the ten countries with the largest percentage of reserves in gold include Germany, Italy, France, China, and India, with the United States holding the largest amount of reserves.

Based in the UK, with operations in India, the Far East, Europe and the U.S., the World Gold Council is an association whose 23 members comprise the world’s leading gold mining companies, representing approximately 60% of global corporate gold production.

Sources: CIA Factbook, World Gold Council

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