10 Countries Getting Slammed By The Gold Market Meltdown (GLD)

Gold prices have fallen over 12.5% since April 1. They are now below the crucial $1,400 level.

This is bad news for central banks that have been diversifying their foreign reserves to include gold.

Yet central banks continue to be net purchasers of gold.

Global central banks bought 109 tonnes of gold in Q1. And their gold holdings increased to 31,735.4 as of May, according to the latest report from the World Gold Council.

We drew on the report to highlight the countries sitting on the biggest official gold reserves.

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 (CBGA 2) ran from September 27, 2004 to September 26, 2009. The third (CBGA 3) will run for five years from September 2009.

10. India

Official gold holdings:
557.7 tonnes

Percent of foreign reserves in gold:
9.6%

The government has been trying to deter people from purchasing the precious metal. Gold imports are blamed for the nation's record high current account deficit.

Source: World Gold Council

9. Netherlands

Official gold holdings:
612.5 tonnes

Percent of foreign reserves in gold:
59.2%

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

Under CBGA2 (2004/2005 –'08/'09) it said it would sell a total of 165 tonnes (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:
3.1%

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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