Gold Tonnage held by Countries as a Percentage of their Fx Reserves

Official Gold Holdings as of April 2009 as per the World Gold Council

 

Country

Tonnes

Percent of Reserves

1

USA

8,133

78.9

2

Germany

3,412

71.5

3

IMF

3,217

N/A

4

France

2,487

72.6

5

Italy

2,452

66.5

6

GLD (Gold ETF)

1,104

N/A

7

China

1,054

1.6

8

Switzerland

1,040

41.1

9

Japan

765

2.2

10

Netherlands

612

61.7

11

ECB

537

23.7

12

Russia

523

4.0

13

Taiwan

423

4.2

14

Portugal

382

90.2

15

Venezuela

364

35.5

16

India

357

4.2

17

UK

310

18.7

18

Lebanon

287

30.0

19

Spain

281

40.5

20

Austria

280

50.5

 

Interestingly you can observe that the relatively higher GDP Growth Nations of India and China have single digit percentage of Gold as part of their Fx Reserves

With China already beginning to flex it’s economic might and demand that the World must debate the need for another Reserve Currency than the US Dollar,it is very likely that it will move it’s Gold Reserves up by over 300% past 4000 tonnes in the coming few years…Currently it holds justs over 1000 tonnes valued at under US $ 30 billion,with Gold hovering around US $ 900/oz…This is  very low at under 2% of China’s Fx Reserves of @ US $ 2 Trillion…Buying another 3000 tonnes at current prices will involve US $ 100 billion and will bring the Gold percentage past 6% of Reserves

Nothwithstanding claims by USA that the fortunes of China and USA are coupled strongly and that the US Dollar will remain the Reserve Currency and that China to maintain it’s economic growth and stability will have no alternative but to invest heavily in US $ Denominated Treasury Instruments,it is likely that China will continue this policy of lowering exposure to the US Dollar…It will continue to buy Gold

In an era of Asset Bubbles in Stocks (2001) and Housing (2008), Gold Price has soared from US $ 250/oz levels in early 2001 to cross US $ 1000/oz in early 2008…Since then it has corrected and is currently just over US $ 900/oz 

Monetary and Fiscal Bailout and Stimuli Packages as a % of the GDP in USA in Recession Years

Year

%

1974

4

1982

2.8

2001

7.2

2009

30

 A fresh Bull run in Gold is indicated in the coming years as the Global Financial Crisis will take a few years to abate and the US $ will seek new lows…This time around the Bailouts are in Trillions of US Dollars and already a huge 30% of US GDP ….This Inevitably will lead to eye popping and heart attacking and brain haemorraging Mounting deficits and National Debt of Trillions of US Dollars in USA….the Fed itself may need a Bailout ! There is clearly no Fresh Thinking by the Obama Government…In the crisis of 2001,Bush too had resorted to pumping in Billions of Dollars into the System…Obama is merely scaling it up to a Trillion and more !His “Yes, We Can! ” Speech now seems to be more an answer to Bush’s poser to him ” Can You Print More Dollars to save USA ! ?”….”Yes, We Can !” 

Enough Ground and Growing Evidence that Gold will enter another bullish trajectory soon…Strong corrections should serve as entry points like when it dipped below US $ 750/oz in late 2008 

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