Historically, when the world is collapsing, people turn to gold. Why? Because gold is viewed as a safe place to store your cash! Gold has been used as a commodity for thousands of years. Economies have placed a value on gold and it’s often used as a hedge against inflation/deflation or a way to store wealth. Watch this video for a quick lesson on Gold.
It’s not just doomsday preppers tucking away gold for a raining day. Investors regularly use gold as a commodity holding in their portfolio. Investors can own Gold through jewellery, physically bar’s/coins, Gold Exchange Traded Funds (ETF), Gold Certificates (No physical ownership) and investing in Gold Mining companies.
Many Countries and Central Banks also choose to store a portion of their wealth in Gold and it can be an insurance policy against world catastrophes. Australia is no different. The Reserve Bank of Australia (RBA) currently holds 80 tons of gold (including Gold on Loan). According to the RBA, their position on gold has not changed since 1997.
How much is Australia’s Gold Worth?
Financial statements for the RBA show that as of the 30th of June 2019, the value of the RBA’s Gold holding was worth $5,159,000,000 (nearly $5.16 billion). This figure is up from the $4.34 billion value in 2018.
But where is all this Gold? You might be surprised to know that nearly 99.9% of the RBA’s gold isn’t even in Australia. The RBA’s Gold is currently stored in the Bank of England, in the United Kingdom. The Gold is stored here because London is the world’s largest trading centre for Gold. The RBA’s Gold bars are allocated a serial number and stored within their underground vault. Our Gold is stored here because it makes trading and lending easy. The serial numbers can be transferred between governments and organisations without the need to physically move the Gold.
The RBA’s pile of gold is just a little drop in the ocean compared to some of the other larger economies. The United States has about 8,133 tons of Gold, Italy as 2,451 tons and Japan has 765 tons.
Fun fact- The Bank of England has the second-largest pile of Gold in the World. There are over 5,000 tons stored in a vault deep beneath the ground and this is worth more than 190 billion pounds. Have a look inside the impressive vault here.