3 ms·

Is there any point to a country having gold reserves? What is it being kept for? (Genuine questions, looking for factual answers)

• cdecker 9mo ago
  Stores of value are, for the most part, societal constructs. Anything has value as long as there is somebody willing to exchange something of theirs for it. That's also what makes value intangible as there is a built-in subjectivity in this. Gold falls into the category "has always had value, so it will always have value" type of thoughts. And that's just what gives it value, out confidence that we can exchange it for something when you need it.
  • dtech 9mo ago
    It's almost the definition of a store of value. If it was actually useful it's called a strategic reserve, like for oil.
    • eesmith 9mo ago
      https://en.wikipedia.org/wiki/Strategic_reserve https://en.wikipedia.org/wiki/Strategic_reserve > A strategic reserve can be ... A commodity, such as intervention stocks of food or petrol ... > Examples of commodity reserves: Global strategic petroleum reserves ... Gold reserve
• toyg 9mo ago
  It can be used as a collateral for loans, last resort for currency buybacks, emergency resource in times of war... Mostly it's a reputational tool to inspire faith in the country's creditworthiness.
• evolve2k 9mo ago
  Intangible financial systems rest (simplistically speaking) on fundamental concepts of trust and reliability (aka what I expect to happen will happen). Once these factors start to breakdown, all these intangible forms of holding wealth loose value. Gold remains as a significant reliable long term store of value. Hence it’s worth maintaining by a nation.
• LunaSea 9mo ago
  Ask Russia, they are making bank on it. Especially with the rubble not being worth much.
  • rwmj 9mo ago
    Are they? I would have thought that Russia's oil exports to countries that are ignoring/bypassing sanctions are far more valuable to them.
    • LunaSea 9mo ago
      Of course, but the price increase of gold made their reserves that much more valuable. The worth of their gold reserves increased by 200B since 2022.
• arter45 9mo ago
  Central banks do a lot of things, including buying and selling currency with foreign partners. If you’re trading using weak or unstable currencies, gold may be a useful alternative.
• AnonHP 9mo ago
  Gold has a few properties: one is that it has had value through history and another is that it’s a physical asset, and because of these two properties, it’s quite liquid. It’s also a metal that doesn’t naturally corrode. Central banks of countries hold various kinds of assets, including bonds and currencies of other countries. But bonds and currencies are just “paper”…or are more vulnerable than gold to shocks in certain conditions. The disadvantage of physical gold is that it doesn’t generate any income by itself, as compared to bonds. During times of higher uncertainty, people and institutions (including central banks) flock to gold.