Gold is a rare metal, as of December 2024, over 216,000 tonnes have been extracted (source: World Gold Council), while there are less than 60,000 tonnes left to be mined (according to the U.S. Geological Survey), with the number of new mines steadily declining.
Gold is valued not only for its scarcity but also for its physical and chemical properties: it is ductile, malleable and resistant to factors such as oxygen and chemical reagents. This last feature prevents it from deteriorating and allows it to be preserved for long periods.
From a financial perspective, gold serves as an effective hedge against adverse events. Its price tends to rise when financial market participants perceive heightened risk, such as during financial crises. Investing in gold can therefore provide protection against scenarios considered highly risky, albeit unlikely.
In the event of currency crises, a central bank can use gold, just like foreign currency reserves, to maintain trust in the national currency by pledging it as collateral for loans or, ultimately, by selling it on the market to purchase the national currency and support its value. A substantial gold reserve gives a central bank greater capacity to preserve trust in the national financial system.
Gold is also a good hedge against inflation, as it tends to maintain its value over time. Moreover, unlike fiat currencies, gold is not an asset 'issued' by a government or a central bank, and its value is therefore not dependent on the issuer's solvency.
Finally, a portion of gold must be held as a precaution to meet potential requests from the ECB for additional contributions ('further calls') under Article 30 of the Statute of the European System of Central Banks and the ECB.
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