Table 3-1 (data as of December 2009) displays the current world's largest holders of the metal along with the percentage of their reserves made up of the metal. The "old economies" of the West are the world's largest gold holders, certainly in percentage terms, according to a realistic analysis of these figures; Asia is only represented by China, Japan, and, more recently, India (hence my decision to display the top 11 rather than the top 10 largest holders). Their metal holdings, on the other hand, only make up a sizable portion of their total reserves.
As can be seen in Table 3-2, a look at the Asian economies themselves reveals how little gold is held by some of these institutions, both numerically and as a percentage. Therefore, excluding the outliers of Sri Lanka and Hong Kong, the Asian countries listed in Table 3-2 hold approximately 3.5% of their reserves in gold, whereas the European countries listed in Table 3-3% hold significantly more than 50% of their reserves in gold. The statistics for changes in central bank gold holdings over the past ten years show a majority of negative signs. To put it another way, central bank activity in the gold market is dominated by gold sales, particularly in the early part of this period. Although there were some purchases, they were typical of a relatively low value and frequently resulted from the requirement that small-scale domestic miners sell the metal to the central bank, which has the option of either adding the gold to its reserves or selling it on the international market.
Until recently, the only news that made headlines was Poland's purchase of gold in the 1990s, which was thought to have come from another European central bank. Other news included China's announcements in 2002 and 2003 that it had purchased metal and Argentina's announcement in 2004 that it had purchased slightly less than 30 tonnes of metal for reserve diversification.
A little background: China announced in January 2002 that it had increased its gold reserves from 12.7 million ounces to 16.08 million ounces. Prior to the press release, the original guarantee, which was first distributed to the International Monetary Fund (IMF) in the 1970s, remained unchanged. Despite a long-standing law requiring the sale of the nation's gold production to the People's Bank of China, also known as the PBoC, this increase occurred in 2002. After that, the PBoC changed the domestic gold price so that gold could come into or leave the country. The figure increased once more to 19.29 million ounces, or roughly 602 tonnes, almost exactly one year later. The reaction at the time was muted because analysts assumed that the increases were more of a restatement of actually held balances than new purchases of the metal.
Since the financial statements that are submitted to the IMF are not independently audited, a number of nations have suggested that either too much or too little information was provided.
Recent announcements have included a number of eye-catching ones. First, China announced in April 2009 that it had increased its gold reserves by 454 tonnes to 1,054 tonnes. The metal appears to have accumulated since 2003 and may have been a mixture of domestic production and scrap. It would appear that the recent completion of the refining process was the reason why news of the increase was made public at this time.
India, Sri Lanka, and Mauritius purchased goods from the IMF in November 2009. There was a lot of speculation about who would buy the remaining gold that the IMF was offering for sale, with China being widely regarded as the most likely buyer. However, as of the time this article was written, these three confirmed purchases totaled 212 tonnes (200, 10 tons, and 2 tons, respectively), and there is currently no indication that any other nation is interested in purchasing the remaining metal.
