The biggest holders of gold are the central banks around the world, who still hold gold as part of their reserves. It is interesting to note that one of the countries with the largest cash reserves in the world, China, holds only 1.3% of its reserves in gold. Were China to increase its holdings in gold to a more significant degree, the effect on the gold price would be significant.
So how has an investment in gold done in the last few years? If you had invested $10,000 in gold in 1999, it would have increased to $38,300, an increase of 283% in ten years. If you had invested the same amount in US shares in the Standard & Poor’s 500 index, your $10,000 would have reduced to $8,600, a loss of 14% over the period.
In conclusion, gold has been a fantastic investment for those who have invested in it. Although it will not pay a dividend or interest, it will never lose all its value, and over time it will rarely disappoint you with its returns.