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Gold reserves refer to gold held by a country’s monetary authority to balance the international balance of payments, maintain or influence exchange rate levels, and hold gold as financial assets. It plays a special role in stabilizing the national economy, curbing inflation, and improving international credit. The management significance of gold reserves is to achieve the maximum possible liquidity and profitability of gold reserves. As one of the main forms of international reserves, gold reserves have their own limitations in terms of liquidity, so the issue of their appropriate size should be considered.

The significance of a correct understanding of the concept of gold reserves is: first, it is conducive to determining a reasonable scale of gold reserves; second, it can avoid being confused with gold assets in the daily operations of commercial banks, which is conducive to the normal operation of banking business; Third, it is helpful for the central banks of countries that implement gold control to correctly formulate gold management policies and promote the healthy development of the country’s gold industry and related industries.

As a part of international reserves, gold reserves are only one aspect of measuring national wealth. A high gold reserve will strengthen the ability to withstand the impact of international investment funds, help make up for the international balance of payments deficit, and help It is important to maintain a country's economic stability, but excessive gold reserves will increase the central bank's holding costs, because the return rate of gold reserves is basically zero in the long term, and the importance of gold reserves has been lost after the disintegration of the gold standard system. greatly reduced. China's current gold reserves are about 600 tons, or 600 million grams, which is less than 0.5 grams per person on average. The number of banknotes issued by the country must be more than that.

Its function is: from a monetary and banking perspective, it controls the total money supply in the market.

Reference factors for determining the size of gold reserves:

1. Balance of payments status

2. Level of foreign debt

3. Foreign exchange reserves Horizontal

The forms of using gold reserves are mainly divided into: direct operation, indirect turnover, and asset portfolio.

1. Direct operation - the monetary authority of a country takes advantage of various opportunities in the international financial market and uses various operating methods to directly participate in the trading activities of the gold market.

2. Indirect turnover - A country's monetary authorities indirectly achieve the purpose of increasing and preserving the value of gold reserves by producing and selling gold coins, carrying out gold leasing, handling gold loans and other businesses.

3. Asset portfolio - convert certain gold reserves into foreign exchange reserves with high profitability and relatively strong liquidity in a timely manner according to the principles of liquidity and profitability, and according to changes in market exchange rates , and then make appropriate adjustments.

my country's use of gold reserves mainly takes two forms:

(1) Through the international gold market, using spot, futures, options and other trading methods to improve the efficiency of gold reserve operations. Yield.

(2) Increase the value of gold inventory through the issuance and distribution of various gold coins.

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