In 2009 the US dollar fell sharply before going up but it couldn't sustain the price and fell one more time in 2011.
As a result, banks, who were once eager to sell gold, started buying it abruptly in an attempt to lower their reliance on the US Dollar as their reserve currency.
They intended to convert all their cash to gold. This was a time when gold was expected to rise to 2000 US Dollars due to more countries showing interest in the shiny metal.
This was predicted by Robert McEwen, the chief executive officer of US Gold Corp.
In an interview, he claimed that China was trying to grow its reserves to overcome the. This, however, wasn?t going to be easy since Russia was also in the same race.
This was considered as an attempt by China to be 'an international player' as stated by Euro Pacific Capital's Michael Pento.
In April 2011, China became the sixth-largest official holder of gold.
On the other hand, the USA topped the list with 74.8 percent of its reserves in the form of gold.
This close competition between China and the USA compelled other countries to let go of their US Dollars and instead increase their gold reserves.
Countries don't rely as much on gold today as they used to about a decade ago but the prices of gold have grown by leaps and bounds in the last few years. Still, countries continue to hoard gold. China and India seem to be doing quite well and are among the largest consumers of the yellow metal.