by Ashley Kindergan, The Financialist
When uncertainty reigns, investors all over the world turn to gold as a safe haven.
But some countries are starting to take issue with their residents’ preference for storing wealth in gold bars, rather than bank accounts.
Large gold imports can throw off a country’s current account balance – the difference between what a country earns and what it spends on foreign trade.
Widespread investments in physical gold also mean that large pots of wealth sit idle, instead of being put to work in the broader economy.
And in countries where gold is a popular investment, those financial institutions which carry large gold deposits, lend cash against gold or offer interest-bearing gold deposit accounts, can pose a risk to the financial system if commodity prices suddenly shift.