(October 10, 2012) - It should come as no surprise to most precious metals fans that countries around the world would choose to invest in gold. After all, it long has been, a key asset that can stabilize in ways other assets rarely can. Recently, Business Insider reported on new figures from the World Gold Council that showed gold bars are becoming even more popular with countries in all parts of the world. These countries are now viewing the yellow metal as a key to helping their economies get through difficult times of disaster or inflation. Thanks to the huge purchases of central banks over the past year, gold prices have been able to rise and hold steady, being bolstered by purchases that head well into the tons. For investors, this is important news because it shows them how the market is affected by the strategies of different countries' central banks.
In Quarter 2 of 2012 alone, nations decided to invest in gold in a big way, buying up nearly 158 tons, more than 60 percent more gold than they bought in the previous quarter of this year. Compared with the amount of gold bars and bullion bought in Quarter 2 of 2011, this is close to a 140 percent increase in sheer volume, which tells investors that the banks are likely readying themselves for unsteady times. If this proves to be the case, gold prices should continue to rise, as so many analysts have been predicting in the media over the past few months. It is clear that during uncertain times, the general market of investors prefers hard assets such as gold and silver.
In discussions related to strategies used by central banks, Business Insider noted, "In fact, there is a school of thought that suggests euro zone members use gold as collateral for sovereign debt issuance to keep bond yields."
As true as this may be, the fact is that much of the rest of the world is coming to see just how strong the value of gold really is for shoring up economies. In the top position is the United States, which sits on over 8,000 tons of gold. This is an impressive sounding figure, but one that is less than half of the volume of holdings in 1952 when holdings were at their peak. The next three biggest holders of gold are European: Germany with close to 4,000 tons; Italy with nearly 2,500 tons; and France with only slightly less than Italy.
Next on the list are relatively new players in regards to the world gold scene. The fifth position is China, who has over 1,000 tons of gold and is expected to pursue a much larger volume soon. Switzerland is not far behind with over 1,000 tons itself, followed by Russia which is becoming a bigger player in the world, too. Japan is next, having sold much of its reserves to fuel its economy after the devastating tsunami of 2011. The Netherlands and India come in 9th and 10th respectively, both close to 600 tons each.
Clearly, gold is an asset so desirable that entire nations find it worth stockpiling; this is a lesson investors of all stripes and styles should certainly heed. While nations invest in plenty of other areas, precious metals continue to hold their appeal even in 2012.