China's purchase of gold for their central bank's reserves has been in and out of the news for the last several months, so I decided to compile a list of the top ten central banks ranked by the amount of gold reserves that they hold:
|CENTRAL BANK||TONNES||% OF RESERVES|
You can see from this chart that China, Russia and Japan are far behind the other industrialized nations when it comes to holding gold as percentage of their central bank's reserves. Some economists say that this is simply because the large gold reserves of those other nations are a relic from when currencies were on the gold standard. This doesn't answer why those nations haven't divested themselves of those large reserves at a profit if they are less desirable than paper securities.
It is interesting to note that the physical gold holdings of the SPDR Gold ETF (GLD) is 1,350.5 tonnes, which would put them in the #6 spot ahead of China if they were a nation instead of a commodity fund.