A Study On The Value Of Gold Reserve

As a special commodity, gold played an important and special role in the economic history of mankind.With the rapid development of the human commodity economy, from the 19th century, the international monetary system has gone from gold standard to the Bretton Woods system, and then to Jamaica, so that gold's monetary attributes gradually subsided. Gold had the most important changes in the status and role of the financial system.Along with this profound change, since 1976, IMF and central banks have reduced gold reserves. The share of total international reserves of gold reserves was declining. This behaviors and trends continued to this day.Because of the expected depreciation of the dollar, voices about augmenting the gold reserve increases.But in academia, such as Vice-President of Academy of Social Sciences, The former Central Bank's Monetary Policy Committee Li Yang and others make the opposite voices to the public:"China's foreign exchange reserves can not buy gold," and explain its reasons from the current market situation and the international trend and non-feasibility of holding gold. In fact, according to speaking of vice president of the People's Bank in the Sino-British financial media briefing in May 2009, "China will regularly proclaim the gold reserves", it have already hinted that China will not dramatically increase their gold reserves.In the last 20 years, from different backgrounds, from different levels and perspectives, many Chinese and foreign scholars believed that the value of gold declined as reserve assets, reducing gold reserves should be an inevitable necessity in the long run through the analysis.In fact, Since the end of gold's monetary attributes in the legal level, because of the agreement of Jamaica, status and share of gold as an international reserve are in constant decline.. Furthermore, from the historical data and analysis concerning the behavior and historical events of central banks, reduction of gold reserves of the Central Bank and IMF would be a long-term trend.In this paper, by the research of the evolution of historical properties of gold, by the research of market characteristics and structure of the evolution, by the comparison and analysis of subjects about function of gold, and by the analysis of the risks faced in case holdings of gold reserve, we deem that gold is not a good reserve assets, and that the value of reserving gold is of limited. China should not continue to increase gold reserveThis paper involves issues related to the gold market. In the context of the financial crisis, this is a hot issue. To clarify relevant issues are very necessary.