Countries store gold? What exactly is it for? You need to know that gold is not only a favorite among collectors and individual investors, this precious metal is also a secret weapon of major countries in maintaining their economic stability.

In the midst of global economic uncertainty gold still stands firm as a physical asset that is able to face global economic turmoil. Not surprisingly, central banks in various countries store gold and increase their gold reserves.

Why are big countries willing to store thousands of tons of gold in their special vaults? Let’s talk more about the reasons why countries store gold.

Reasons Countries Store Gold

1. Value Stability

Gold is known as a safe haven asset. Its value tends to stabilize even when the world is experiencing economic pressure or market turmoil. Unlike fiat currencies that are vulnerable to inflation or monetary policy, gold cannot be “printed” by central banks, so its supply is limited and its value is better protected.

For countries, storing gold means keeping some wealth in a form that is more resilient to long-term economic uncertainty. This is the main reason why countries keep gold in their foreign exchange reserves.

2. Hedge Against Crisis

In the event of a global recession, financial crisis, or geopolitical conflict, global investors tend to look for safe assets and gold becomes the first choice.

This condition usually pushes the price of gold up significantly. Countries with large gold reserves are better equipped to deal with economic pressures because they have assets that increase in value in times of crisis.

Gold serves as an “economic insurance” that can maintain the purchasing power and value of the country’s wealth at the most critical time. Therefore, it is important for countries to store as much gold as possible.

3. Reserve Diversification

Most countries’ foreign exchange reserves are held in foreign currencies, such as the US dollar, euro, yen or pound sterling. However, the value of these currencies can fluctuate depending on the policies of the issuing country or global economic dynamics. Instead, the country keeps gold in its central bank.

By including gold in the reserve portfolio, the country can diversify its assets so that it is less dependent on one or two foreign currencies. This makes it an important risk mitigation strategy to maintain the country’s financial stability.

4. High Liquidity

One of the main advantages of gold is its very high level of liquidity. This means that gold can be easily cashed out or exchanged into other forms anytime and anywhere.

For countries, storing gold is very important especially when facing urgent conditions such as foreign debt payments, emergency financing, or sudden needs to stabilize the economy.

The gold market is global and active around the clock, so gold can be sold or pledged immediately without waiting for a complicated process like other assets. This is why gold is often considered a “ready-made” foreign exchange reserve that is flexible and easily accessible in any situation.

5. Durable Asset

Gold is one of the most durable assets and is not affected by weather conditions or physical damage, making it an ideal choice for long-term storage.

Gold stored by countries in large quantities has the potential to retain its value over time, and even appreciate in value over the long term.

It is no wonder, then, that many countries choose to allocate a large portion of their foreign exchange reserves in gold, so that they can maintain economic stability, especially in the midst of market turmoil or global uncertainty.

Countries Only Store Gold, Friend When?

If countries only store gold as a mainstay asset for economic stability, why don’t we? Gold is not just for collections or jewelry, but can be a financial “shield” that protects you from crisis, inflation, and future uncertainty.

Come on, what are you waiting for, start investing in digital gold now through the Treasury platform. Digital gold allows you to have valuable assets without having to keep the physical gold! It’s easy, safe, and can start from a small nominal of only Rp5,000, especially since it is BAPPEBTI certified.