10 Countries Sitting On Enormous Piles Of Gold (GLD)

In an uncertain global economic environment, central banks have been purchasing gold.

Some have argued that euro zone members should use gold as collateral for sovereign debt issuance to keep bond yields low.

The World Gold Council estimates that central banks will have purchased 500 tons of gold in 2012, up from 465 tons last year. And gold prices have also been supported by central bank gold purchases.

Global gold reserves total 31,491 tons as of December 2012. We highlighted the ten countries with the biggest official gold holdings as reported by the World Gold Council.  We also included the percent of foreign reserves they possess in gold.

Note: CBGA refers to the Central Bank Gold Agreements. The first Agreement (CBGA 1) ran from September 27, 1999 to September 26, 2004.  The second Agreement (CBGA 2) ran from September 27, 2004 to September 26, 2009. The third Agreement (CBGA 3) will run for five years from September 2009.

#10 India

Official gold holdings:
557.7 tonnes

Percent of foreign reserves in gold:
10.3 percent

The Reserve Bank of India is known to buy IMF gold and considers gold to be a safe investment, but rarely comments on its plans to buy gold.

Source: World Gold Council

#9 Netherlands

Official gold holdings:
612.5 tonnes

Percent of foreign reserves in gold:
60.3 percent

Back in 1999, the Netherlands announced under the Central Bank Gold Agreement (CBGA1) that it would sell 300 tonnes of gold during the five years, but only managed to sell 235 tonnes.

Under CBGA2 (2004/2005 –'08/'09) it said it would sell a total of 165 tones (which included the 65 tonnes left over from CBGA1), and it announced no sales under CBGA3 (from 2008/2009 – '13/'14).

Source: World Gold Council

#8 Japan

Official gold holdings:
765.2 tonnes

Percent of foreign reserves in gold:
3.3 percent

Japan's gold reserves were at just 6 tonnes in 1950, and its central bank registered its first serious jump in gold holdings in 1959, with purchases increasing by 169 tonnes from the previous year.

In 2011, the Bank of Japan sold gold to pump ¥20 trillion into the economy to calm investors after the tsunami and nuclear disaster.

Source: World Gold Council

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