In the time of unstable economic activities, large state deficits, tumultuous monetary policy, there is a common opinion that gold is much safer “currency” than paper bills, which are often without coverage.
That is how individuals think, but states as well, so they strive to diversify the foreign currency reserves as much as possible, i.e. they try to divide them to money and gold as evenly as possible. The problem is in limited amounts of gold on the market and the fact that countries that have strong currencies for purchasing the shiniest metal are in huge advantage.
Information on the situation on the gold market are provided by the World Gold Council, which recorded a growth in demand in the second quarter of this year (April – June), which is interpreted as an attempt of protection against global upheaval, especially after the decision of the Britons to leave the European Union.
In this period, total demand for gold amounted to 1.050 tons, i.e. 15 percent more than in the same period last year.
Which countries have the largest gold reserves? Report of WGC published this month says that USA is on the first place with 8.133,5 tons of gold, then Germany (3.378,2 tons), Italy (2.451,8 tons), France (2.435,8 tons), China (1.823,3 tons), Russia (1.498,7 tons), Switzerland (1.040 tons), Japan (765,2 tons), the Netherlands (612,5 tons), etc.
What is interesting is that on the list are also international monetary institutions – the International Monetary Fund (2.814 tons) and the Central European Bank (504,8 tons).
Where is Bosnia and Herzegovina? On the 89th place, with reserves of three tons of gold. Of the countries in the region, Serbia has the largest gold reserves (18.4 tons) and it is on the 59th place, while Slovenia is three places ahead of BiH with 3.2 tons.
Speaking of the gold reserves, probably more important than the effective amount is the data on proportional share of gold in total foreign currency reserves of one country.
There we can see the greatness of superpowers, because gold makes up 76 percent of foreign currency reserves of the USA, nearly 70 percent in Germany, 69.4 percent in Italy, 65.4 percent in France, 63.3 percent in the Netherlands, 71.3 percent in Portugal, as much as 91 percent in Tajikistan, only 2.6 percent in Japan…
What about Bosnia and Herzegovina? Gold reserves make up only 2.6 percent of foreign currency reserves of the country, which means that gold bars would not be able to maintain the stability of convertible mark if the European monetary system collapsed.
If the price of one ounce of gold is 1.320,75 USD (1.180 EUR) and the price of one kilogram of gold is almost 38.000 EUR, it is clear that BiH gold reserves are worth 114 million EUR, and total foreign currency reserves of the country amount to a little under 4.4 billion EUR.