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UK gold reserves

Despite having the fifth largest economy in the world, the UK is 16th globally for gold reserves. The big question is though: how much gold reserves does the UK have? As of 2023, the Bank of England holds approximately 310 tonnes of gold for the UK.

The Bank's vault, as seen below, holds all of Britain’s gold reserves. Most is 24 carat gold but some, older gold is likely 22 carat or even 900 purity depending on the age and origin.

The Bank of England's gold vault.

The Bank of England's gold reserves. Photo courtesy of the Bank of England Flickr account.

The Bank of England also holds gold reserves for other countries. The reputation for security at the Bank of England’s vault means that foreign reserves are often stored in London rather than their own national banks or facilities. The Bank of England say they hold around 400,000 bars of gold, worth over £100 billion. Only the New York Federal Reserve holds more gold, not Fort Knox as many may believe.

Interestingly, most of the UK’s considerable gold reserves were shipped out to Canada during World War II as part of the famous ‘Operation Fish’. Seeing the progress Germany had made across Europe, Churchill feared that Britain would be unable to buy the weapons necessary to fight if London were to be occupied.

Ships laden with UK gold bullion sailed in secret from ports across the country, delivering the gold to Ottawa and Montreal for safekeeping. Despite the size of the operation, involving thousands of people, the gold successfully arrived without any losses or the Germans learning of the precious cargo.

UK gold reserves sale

The UK historically has held large amounts of gold in reserve. In 1950 this reached a high of 2,543 tonnes of gold; over eight times the amount currently held. As seen in the chart below, this amount declined during the 1950s and 60s before a significant sale was made in 1970, cutting the reserves almost in half. This was done to protect the Sterling exchange rate (which had been devalued in 1967) and in response to the IMF request that 25% of payments be made in gold.

Historical chart of UK gold reserves

Following the gold reserves sale in 1970, the amount remained steady at around roughly 650 tonnes until the late 1990s. Between 1999 and 2002, the infamous sale by Chancellor of the Exchequer - and later Prime Minister - Gordon Brown, saw Britain’s Gold Reserves cut in half again.

Click here to read our 20th anniversary news story on Brown's decision.

Since 2010, UK gold reserves have stayed at 310-314 tonnes, fluctuating only fractionally since.

Why did the UK sell its gold reserves?

Governments hold gold reserves as a form of insurance against economic instability. If fiat (paper) currencies were to crash or collapse, then the government has assurance that they still at least have an asset of value to trade with or pay national debts.

In the case of Gordon Brown, the former Chancellor intended to take advantage of gold's price dropping in the late 1990s. Brown's plan was to sell some of the UK's gold reserves (which were half of the nation's total currency reserves) and use the money as reinvestment for other assets such as the Dollar, Euro, and Yen, as well as to reduce the national debt. Such a policy was repeated by Sarkozy as France's Chancellor in the early 2000s, but both men acted just before gold's price and demand rapidly improved.

The sale of the gold reserves has been heavily criticised over the years. The early announcement of Brown's plan drove the price of gold down by 10% ahead of the sale. The use of auctions was also considered a poor way to ensure the best price. In 2001, the price of gold began to climb once more, garnering further criticism over the potential money that could have been made had Brown waited a few more years. The period has been dubbed ‘Brown’s Bottom’, but reaction has been somewhat kinder in recent years given the accepted difficulties of forecasting gold price fluctuations.