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Concept
Gold reserve
Summary
A gold reserve is the gold held by a national central bank, intended mainly as a guarantee to redeem promises to pay depositors, note holders (e.g. paper money), or trading peers, during the eras of the gold standard, and also as a store of value, or to support the value of the national currency.
The World Gold Council estimates that all the gold ever mined, and that is accounted for, totalled 190,040 metric tons in 2019 but other independent estimates vary by as much as 20%. At a price of US, reached on 16 August 2017, one metric ton of gold has a value of approximately 7.5 trillion at that valuation and using WGC 2017 estimates.
During most of history, a nation's gold reserves were considered its key financial asset and a major prize of war.
A typical view was expressed in a secret memorandum by the British Chief of the Imperial General Staff from October 1939, at the beginning of World War II. The British Military and the British Secret Service laid out "measures to be taken in the event of an invasion of Holland and Belgium by Germany" and presented them to the War Cabinet:
It will be for the Treasury in collaboration with the Bank of England, and the Foreign Office, to examine the possible means of getting the bullion and negotiable securities into the same place of safety. The transport of many hundreds of tons of bullion presents a difficult problem and the loading would take a long time. The ideal would of course be to have the gold transferred to this country or to the United States of America. [...] The gold reserves of Belgium and Holland amount to about £70 million and £110 million respectively. [Foot]Note: H. M. Treasury has particularly requested that this information, which is highly confidential should in no circumstances be divulged. The total weight of this bullion amounts to about 1800 tons and its evacuation would be a matter of the utmost importance would present a considerable problem if it had to be undertaken in a hurry when transport facilities were disorganized.
Official source
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