These two organizations are holding gold reserves for foreign central banks and many other organizations. New York and London are also the 2 largest gold trading centers in the world, with a history of safe and reliable storage spanning more than a century.
Currently, there are more than 500,000 gold bars stored at the Federal Reserve Bank of New York, making it the world's largest gold and currency reserve by the end of 2024.
Since 1970, central banks in many developed economies in Europe and the US have sold more gold than bought. However, by the end of 2024, these banks still accounted for 57% of total global gold reserves, according to Brookings Institution analysis.
The US is the country holding the most gold, followed by Germany, Italy and France. Meanwhile, central banks in emerging economies are currently the largest gold buyers.
About a decade ago, Germany brought back part of its gold reserves, but currently still keeps about half in the country, 1/3 in New York and the rest in London.
With Italy, about 44% of gold is stored domestically, almost equivalent to the amount held in New York, the rest is in the UK and Switzerland.
One reason to keep gold in New York and London is the absolute level of security: No gold theft has ever occurred in these holds, including during transportation. During World War II, gold in London was even secretly transferred to Canada to ensure safety for many years.
Another reason is liquidity. "They want to keep gold near where it can be traded," said Mr. Krishan Gopaul, senior analyst at the World Gold Council.
There are currently more than 60 central banks depositing gold at the Bank of England. The bank stores about 430,000 gold bars in 9 vaults, allowing central banks to trade with each other without having to move gold out of the storage system.
The issue of where to store gold is particularly important for countries that are increasing reserves. India has increased its total gold reserves, while reducing the proportion of gold deposited in the Bank of England.
Turkey, in the process of increasing its domestic gold holdings, withdrew all gold from the New York Federal Reserve Bank in 2017, and then withdrew from Switzerland 1 year later. The country also once reduced its gold holdings at the Bank of England, but then increased back most of its reserves in London because gold can be used more flexibly for transactions here.
Currently, only about 20% of Poland's central bank's gold reserves are kept in the country, the rest are in New York and London. However, Poland aims for a more even distribution between the country, New York and London.
Conversely, the Central Bank of the Czech Republic decided to keep almost all of its gold in London, where it can lend to other central banks and generate profits.
Many central banks maintain strict secrecy about gold storage locations. The Central Bank of China is one of the largest gold buyers in recent years, with a 17-month continuous purchase, but almost no information about storage locations. At the end of last year, for the first time in 4 years, the Central Bank of Brazil increased its gold reserves but also did not announce storage locations.
For decades, London and New York have dominated global gold hoarding, but Hong Kong (China) is striving to become a rival, providing an alternative outside of Western countries.
