India 8th on Forbes list of nations with most gold, US leads

India ranks eighth on the Forbes list of Top 20 Countries With Largest Gold Reserves, with 840.76 tonnes of the precious metal. The United States tops the list, which covers the first quarter (Q1) of 2024, as released on the official website of Forbes India. Germany ranks second and Italy is at number three, while France takes the fourth spot and Russia completes the top five.

“India holds a significant position in global gold reserves, ranking 8th in the list of countries with the most gold reserves. With a rich cultural affinity for gold and a history of gold being a traditional store of value, India's gold reserves contribute to its economic stability and play a key role in the country's financial landscape,” observed a report that presents the list on the Forbes India website.

The gold reserve ranking drawn up by Forbes is based on estimates of the World Gold Council.

“Why do countries keep gold reserves? Because gold reserves are critical for the economic stability of a country, acting as a reliable store of value, particularly during financial uncertainties,” the report explained.

“The gold standard was a global practice in the late 1800s and a significant part of the 1900s. In this era, countries backed the value of their paper money with gold by establishing a fixed exchange rate between their currency and a specific amount of gold. Essentially, each unit of currency issued had a corresponding value in gold, and individuals could exchange their paper money for actual gold at this set rate,” the report added.

THE TOP 20

According to the Forbes list, the US, with gold reserves of 8,133.46 tonnes, tops the charts while second-placed Germany has a 3,351.53-tonne reserve of the precious metal.

At the third spot, Italy has gold reserves of 2,451.84 tonnes while France with 2,436.97 tonnes is at number four. Russia ranks fifth with gold reserves of 2,335.85 tonnes.

China (2,264.32 tonnes) and Japan (845.97 tonnes) are at the sixth and seventh respectively, ahead of India (840.76 tonnes), according to Forbes India.

The Netherlands (612.45 tonnes) is ninth, Turkey (584.93 tonnes) is at number 10.

Portugal (382.66 tonnes), Poland (377.37 tonnes), Uzbekistan (365.15 tonnes), the United Kingdom (310.29 tonnes), Kazakhstan (298.8 tonnes), Spain (281.58 tonnes), Austria (279.99 tonnes), Thailand (234.52 tonnes), Singapore (228.86 tonnes) and Belgium (227.40 tonnes) complete the top 20.

WHY GOLD MATTERS

According to Forbes, nations associate importance to robust gold reserves because “gold is considered a stable and reliable store of value” that “can instil confidence in their economic stability, especially during financial uncertainty”.

Gold also boosts the value of a nation’s currency, Forbes adds, despite the fact that the gold standard is no longer commonly applied to gauge a nation’s economic stability. Also, some countries still view gold reserves as a means to maintain currency stability.

Gold being “a tangible asset” allows nations to diversify portfolio and its “inverse correlation with the US dollar” lends significance to it. As the dollar drops, gold tends to rise in value, Forbes notes.

That apart, many nations use gold to settle trade imbalances or offer the precious metal as collateral for loans. Gold also acts as a hedge in times of crises, as a safeguard against inflation and currency devaluation.

(All figures according to report on Forbes India official website, published September 17 2024)