Gold reserves

gold-barsThe RBA Annual Report 2011 states the following on page 21:

The Reserve Bank holds 80 tonnes of gold on its balance sheet.

 

At a conversion rate of 1 tonne = 35,273.9619496 ounces, it means that the RBA holds approximately 2,821,916.95 ounces (i.e. roughly 2.8 million ounces) of gold.

Placing this into perspective - here are some rough comparisons.

  • If our currency notes (i.e. $50,059 million as of 2011) were backed by this gold - it would mean there would be 1 oz for every $17,739 of notes.
  • If all our money (i.e. broad money supply of $1,467.2 billion as of May 2012) were backed by this gold - it would mean that there would be 1 oz for every $519,930 of money in the economy.

 

 It should be rather obvious that at the current gold price - the RBA does not have sufficient gold to fully back the Australian money supply (be that currency notes or "broad money").