Where the world keeps its gold – and why it has become a question of power

LONDON — Gold’s growing popularity has created a tension for countries that buy more of the metal as a hedge against global risks: its usefulness depends on where it is stored.

Two of the largest gold deposits are in New York and London, where the Federal Reserve Bank of New York and the Bank of England hold reserves for foreign central banks and other institutions. The two cities are the largest gold trading centers in the world and have a history of safe and reliable storage dating back more than a century.

There are more than 500,000 gold bars at the New York Fed, which was the largest single deposit of monetary gold at the end of 2024. The quantity peaked in 1973, shortly after the United States stopped using gold to back the dollar. This measure, in practice, removed gold from its central place in global finance.

Since 1970, central banks in many advanced European economies and the United States have sold more gold than they bought. Still, at the end of 2024, these central banks accounted for 57% of global gold reserves, according to an analysis by the Brookings Institution, a think tank. The United States has the largest reserves, followed by Germany, Italy and France. The biggest buyers today are central banks from emerging economies.

The only countries that normally needed to worry about storing their gold in New York or London were those at risk of ending up on the wrong side of sanctions. Former Venezuelan political leaders have been fighting a legal battle for years to recover gold reserves held in the Bank of England’s coffers.

But concern spread. President Donald Trump’s frequent attacks on Europe have led some leaders to ask whether it might not be better to keep their gold ‘at home’.

Requests for the repatriation of gold in Europe have been occasional, coming mainly from some parliamentarians and economists in Germany and Italy.

Germany repatriated some of its gold about a decade ago, but has since kept roughly half of its reserves at home, a third in New York and the rest in London. About 44% of Italy’s gold is held domestically; a similar proportion is in New York, and the remainder is held in the United Kingdom and Switzerland. The central banks of Germany and Italy have said they have no plans to bring their gold back home.

One of the reasons to keep gold in New York and London: both central banks have an impeccable safety record. The gold was never stolen from any of the vaults, not even during transport. During World War II, gold in London was secretly transferred to Canada, where it was kept for several years.

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Another reason is liquidity. “They want to keep gold close to where they can transact,” said Krishan Gopaul, senior analyst at the World Gold Council.

More than 60 central banks hold gold at the Bank of England, Andrew Bailey, governor of the British central bank, recently said in an interview with Sky News. The Bank of England keeps around 430,000 gold bars in nine vaults, which allows central banks to buy and sell among themselves without the gold needing to leave the bank’s possession.

The storage issue is most pressing for countries that are increasing their reserves. India has increased the total volume of gold it has, at the same time as it has reduced the amount it keeps at the Bank of England.

Turkey, while increasing the amount of gold held domestically, withdrew all its reserves from the New York Fed in 2017 and, a year later, also from Switzerland. The country had also reduced its holdings at the Bank of England, but later rebuilt much of those reserves in London, where gold can be used more easily in transactions.

Only 20% of Poland’s central bank’s gold reserves are held in the country; the remainder is held by the New York Fed and the Bank of England. But the goal is to reach an equal division between Poland, New York and London in the future, said Adam Glapinski, president of the National Bank of Poland.

“Home storage is a fundamental pillar of geographic diversification for a simple reason: national resilience and strategic autonomy,” he said. “To be clear: I don’t foresee any extreme scenarios on the horizon, but my job is to plan for them.”

In contrast, the Czech Republic’s central bank has decided to keep almost all of its gold in London, where it can lend it to other central banks and generate returns.

“London is the gold market of Europe,” said Jan Kubicek, a board member of the Czech central bank. “We save money on transaction costs by using Bank of England vaults.”

For perhaps obvious reasons, many central banks keep the location of their gold strictly confidential.

China’s central bank has been one of the biggest buyers in recent years, buying gold for 17 consecutive months, but there are very few details about where the reserves are stored. Brazil’s central bank increased its gold reserves at the end of last year, for the first time in four years, but has not revealed where it keeps them.

For decades, London and New York have dominated gold storage, but Hong Kong is trying to emerge as a competitor, offering an alternative outside of Western countries.

Central banks are expected to continue purchasing large volumes of gold, according to the World Gold Council, and the decision on where to store it will remain an important consideration.

“Risk needs to be humbly acknowledged and prudently managed,” Glapinski said. “This is what we do in our strategy to diversify gold storage locations.”

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