What Countries Have the Largest Gold Reserves?

The United States holds the world's largest stockpile of gold reserves by a considerable margin. The country's government has almost as many reserves as the next three largest gold-holding countries combined—Germany, Italy, and France. Russia rounds out the top five. The International Monetary Fund (IMF) is one of the top gold reserve holders with 2,814.10 metric tons (3,102.01 standard tons)—almost as much as Germany.

How Gold Reserves Work

Gold has served as a means of exchange, to varying degrees, for thousands of years. For much of the 17^th to 20^th centuries, the paper money issued by national governments was denominated in terms of gold and acted as a legal claim to physical gold. International trade was conducted using gold. For this reason, countries needed to maintain a store of gold for both economic and political reasons.

Most countries stopped backing their currencies with gold in the mid-1900s. Switzerland was the last country to fully drop the gold standard in 1999. Nevertheless, governments still house huge stacks of bullion as a failsafe against hyperinflation or another economic calamity.

For businesses, gold represents a commodity asset that is used in medicine, jewelry, and electronics. For many investors, both institutional and retail, gold is a hedge against inflation or recessions.

Countries With the Largest Gold Reserves in the World

As noted above, the U.S. is the country with the largest gold reserves. Germany, Italy, and France follow, while the Russian Federation rounds out the top five. Let's take a look at how much they hold along with some of the details of each country. Note: the figures below are as of February 2024.

United States

The United States holds 8,133.46 tons of gold in its reserves. During the height of the Bretton Woods international exchange system, when the U.S. offered to house and protect other countries' gold in exchange for dollars,

it was reported that between 90% and 95% of the entire world's gold reserves lay in American vaults. Decades later, the U.S. still holds the most. Gold makes up over 75% of its foreign reserves. 

Germany

As much as 3,352.65 tons of gold are held in Germany's reserves. This represents two-thirds of its foreign reserves. The country's government keeps its gold reserves in several locations, including:

• Deutsche Bundesbank in Frankfurt am Main
• U.S. Federal Reserve Bank branch in New York
• Bank of England in London
• Banque de France in Paris

Italy

Italy falls in the third spot with 2,451.84 tons of gold. The eurozone crisis led some to call for Italy's government to sell some of its gold reserves to raise funds, but no such plans ever materialized.

The country stores the majority of its gold bullion—more than 87%—in the Bank of Italy's head office and the United States. The remainder is divided between vaults in Switzerland the the United Kingdom. According to the central bank, it stores gold in different locations for historical reasons and to minimize risk.

France

With 2,436.97 tons, France has the fourth-largest gold reserves in the world. Former President of France Charles de Gaulle was partially responsible for the collapse of the Bretton Woods system when he called the U.S. bluff and began trading dollars in for gold from the Fort Knox reserves.

Then-president Richard Nixon, who knew that the fixed rate of $35 per gold ounce was too low, was eventually forced to take the U.S. off the gold standard, ending the dollar's automatic convertibility into gold.

Russian Federation

Russia overtook China as the fifth-largest holder of the yellow metal in 2018 with 2,332.74 tons. It now holds Russia's increase in its gold stores was seen as an attempt to diversify beyond American investments. Russia mainly sold U.S. Treasury bonds to buy the bullion.

Why Do Countries Hold Gold Reserves?

Gold provided governments with a way to back the value of their fiat currencies. Since the gold standard no longer applies, why do countries still hold gold reserves? There are a few reasons why gold remains in central bank vaults:

• Like individual investors, governments need to diversify their portfolios. Holding different investment vehicles mitigates risk and ensures safety.
• Even though the gold standard is a thing of the past, many nations' governments still believe that holding gold provides some degree of stability to their currencies.
• Gold acts as a safeguard and hedge against inflation, which helps boost confidence in a nation's economy.

Demand for gold is high among investors and jewelry consumers, as well as central banks. Central banks bought gold in 2022 as quickly as they did in 1967. As much as a fifth of the world's gold is mined by central banks.

The Bottom Line

Gold has long been viewed as one of the best stores of value. It is no longer used as a means to back national currencies. Understandably, governments feel the need to control it to ensure they have a backup if there is ever a widespread financial system failure.