$Gold - main 2412(GCmain)$ prices surged nearly 20% in 2024. Despite gold being near all-time highs, bullish analysts and investors far outnumber the bears.
By the end of 2023, the top five gold-producing countries were China, Australia, Russia, Canada, and the U.S., producing 370 tons, 310 tons, 310 tons, 200 tons, and 170 tons of gold, respectively.
According to the World Gold Council (WGC), as of May 2024, the U.S. holds the largest gold reserves globally, with 8,133 tons worth $628 billion, more than double Germany’s 3,351 tons, which ranks second.
Where did all this gold come from, given the lack of major domestic gold mines in the U.S.? Most of America’s gold reserves were accumulated rapidly after World War II, which laid the foundation for the U.S. dollar economy.
During WWII, the U.S. was unaffected by the war, leading to rapid economic growth and increased industrialization. Many war-torn countries needed to import materials from the U.S. for reconstruction. With the global monetary system underdeveloped at the time, these transactions required gold for settlement, leading to a significant accumulation of gold reserves by the U.S.
Following this, the U.S. began using its vast gold reserves to acquire gold globally. Today, a significant portion of the U.S. gold reserves is stored in Fort Knox, Kentucky, with the remainder held at the Federal Reserve, the Denver Mint, and West Point.
Central banks worldwide maintain large gold reserves due to gold's safety, liquidity, and returns, representing about 20% of all gold ever mined. In the first half of 2024, central banks purchased a record 483 tons of gold.
Turkey was the largest buyer, purchasing 45 tons, followed by India with 37 tons. Meanwhile, China’s central bank slowed its gold purchases recently, pausing in May and June after increasing reserves for 18 consecutive months.
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