Empirical Project - Research Paper Example

The secondary information is from the gold reserves of gold holding IMF countries from a Book and few websites. Literature Review The gold reserve of a country is that gold held by the central bank or nation is depicted as a commodity to redeem which assures for the depositors to pay and noteholders. Gold is treated as liquid money which is mainly used for trading purposes against any currency. The gold reserves as of date are exclusive helps in settling the international transactions.

The central banks by the end of 2004 and investment funds held 19% of all above-ground gold as bank reserve assets. It is predicted that the gold mined by the end of 2009 sum up to 165,000 tonnes. Fixed at US$1000/oz. as price, it exceeded in 2008 and 2009, one tonne of gold has a value of approximately US$32.15 million. The overall gold mined so far would exceed US$5 trillion. IMF gold holdings The International Monetary Fund by June 2009 held 3,217 tonnes (103.4 million oz.) of gold, which is constant over many years.

In 2009, the International Monetary Fund announced that it will disburse 12.5% of the gold holdings, a maximum of 12,965,649 fine troy ounces (403.3 tonnes) based on the recent income model as agreed in April 2008, and further declared the sale of 200 tonnes to India, 10 tonnes to Sri Lanka, and further 10 Metric tonnes of Gold was also given to Bangladesh in September 2010 and 2 tonnes to the Bank of Mauritius. These gold were sold in stages at existing market prices. The IMF reiterates the book value of its gold which is far below the market value.

This book value was SDR 35 in or about US$47 per troy ounce in the year 2000. Further, the resale value of gold reserve value faced a challenge for various causes. In fact, Canada no idea of revaluing the gold reserves, as it may be pushed to sell the gold on the open market and further decline of gold prices may be the result. Officially reported gold holdings Gold reserves per capita The International Monetary Fund’s data on national assets of various countries are given in the following table.