A:

The United States holds the largest stockpile of gold reserves in the world by a considerable margin. In fact, the U.S. government has almost as many reserves as the next three largest countries combined. Rounding out the top five are Germany, Italy, France and China. The International Monetary Fund (IMF) is reported to have more gold reserves than Italy but less than Germany. Gold reserves are measured in terms of metric tons.

Gold has served as a means of exchange, to varying degrees, for thousands of years. For much of the 17th to 20th centuries, the paper money issued by national governments was denominated in terms of gold and acted as a legal claim to physical gold. International trade was conducted using gold. For this reason, countries needed to maintain a store of gold for both economic and political reasons.

There is no contemporary government that requires all of its money to backed by gold. Nevertheless, governments still house huge stacks of gold as a failsafe against hyperinflation or other economic calamity. Every year, governments increase their gold reserves by hundreds of tons.

Gold is the most followed and most globally traded commodity, according to a 2013 Futures magazine report. For non-governments, gold represents a commodity asset that is used in medicine, jewelry and electronics. For many others – including governments – gold is an investment asset and hedge against inflation or recession.

Largest Gold Reserves in the World

As of 2014, these are the five countries with the largest gold reserves:

1. United States - 8,133.5 tons: During the height of the Bretton Woods system of international exchange, when the U.S. offered to house other countries' gold in exchange for dollars, it was reported that between 90% and 95% of the entire world's gold reserves were in American vaults.

2. Germany - 3,387.1 tons: Germany only keeps about one-third of its gold reserves in its country. Nearly half are kept in at the U.S. Federal Reserve branch in New York, and another 20% are kept in either London or Paris.

3. Italy - 2,451.8 tons: The eurozone crisis has led some to call for Italy's government to sell some of its gold reserves to raise funds, but no such plans seem imminent.

4. France - 2,435.4 tons: Former President of France Charles de Gaulle was partially responsible for the collapse of the Bretton Woods system when he called the U.S.' bluff and began exchanging dollars for gold from Fort Knox. Richard Nixon, who knew that the $35 per ounce rate was too low, was forced to end the dollar's convertibility into gold.

5. China - 1054.1 tons: Russia actually has more official gold holdings, but most analysts believe that China under-reports its actual gold reserves by a considerable margin. With more gold currently being mined in China than anywhere else in the world, the Chinese government can add considerable reserves without letting the international community know.

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