History of gold

What are the central bank's gold reserves ?

The central bank plays a major role in a country's economy. It is the guarantor of monetary policy and its application. Currently, gold no longer has monetary value. So why do central banks continue to buy gold ? We answer you in these lines!

WHAT IS THE WORLD’S GOLD RESERVE ?

Gold cannot be created and its reserves are limited. The various mining techniques made it possible to uncover nearly 200,000 tonnes of gold. The use of this noble metal is done both in industry and in jewelry. However, there are also two other jobs:

  • Demand from individuals: gold coins or ingots;
  • Central bank reserves.

It is estimated that central banks hold around 20% of the world's gold stock, or more than 34,000 tonnes. The various current geopolitical crises are pushing certain countries, such as Russia or China, to invest massively in the purchase of gold.

WHY CENTRAL BANKS BUY GOLD ?

Historically, gold has been used as currency since ancient Greece. In contemporary times, states acquired gold to guarantee the value of minted notes and coins. The demonetization of gold in the 1970s ended the relationship between gold and legal tender. However, gold reserves have not decreased. States and central banks continued to buy gold for various reasons:

  • Guarantee financial independence;
  • Gold is not subject to any nation: its independence allows it to be a safe haven;
  • Gold reserves are investment and diversification products: in the event of a major crisis, the price of gold does not collapse, unlike money which can disappear;
  • Ensuring foreign exchange operations: the devaluation of a currency requires an emergency solution to continue international transactions.

WHERE IS THE GOLD RESERVE IN FRANCE ?

France has the fourth largest gold reserve in the world after the United States, Germany and Italy, and ahead of Russia and China. The official French reserves are located in Paris and extend over 10,000 mÂČ. Since 1927, the national stock has been kept in a large room, called “La Souterraine”, dug 27 meters below the surface. It is the Banque de France which protects, preserves and manages the approximately 2,436 tonnes of French gold. In comparison, it is the equivalent of 100 billion euros, but this figure varies depending on the price of gold.

You want to invest in gold ? Gold Union offers a wide range of gold bars or silver and investment gold coins, accessible to as many people as possible. To find out more, make an appointment with one of our agency advisors or via our e-commerce site.