An unprecedented number of central banks plan to improve gold reserves

A record number of central banks around the world intend to improve gold reserves during the next twelve months, against the background of the performance of the yellow metal during periods of crisis, and the ability to provide protection against inflation. In a survey of 72 monetary authorities, 43% of them said they expected their gold reserves to increase, compared to 29% last year, which is the highest level since the start of data collection 8 years ago by the World Gold Council and YouGov. None of the participants expected a decrease in reserves. Central banks and the rise of gold The central banks are one of the most important engines for the rise of gold prices that have been going on for some time, during which the price has doubled since the late 2022. The purchase staff strikingly accelerated after the Russian invasion of Ukraine, when the freezing point of a large part of Russia’s foreign rural emphasized, emphasized the attraction of gold as a backup. Gold is rising with Trump’s call to vacate Tehran and the increasing demand for safe ports. More details here, Shawkai -van, head of global central banks in the World Gold Council, a body that represents gold mining businesses: “There are many large increases in some of these numbers. Western countries have stopped selling gold, while the emerging markets began to build the gaps as the precious metal.” The vast majority of survey participants expressed their belief that the golden reserves of central banks will continue to rise worldwide during the next 12 months. They pointed out the performance of gold during the crises, the role of diversifying the governor, and its function as a store of value, as most important factors behind this trend. Central banks have bought more than a thousand tons of gold annually over the past three years and are expected to continue this year, according to the consultant “Metals Focus”. Central banks have bought gold with more than their sales over the past 15 years, after causing the market to fall over a full decade during the 1990s by their net sales at the time. The golden share of Global Reserves has contributed to these purchases overcome the gold to the euro to become the second largest reserve origin for Global Central Banks late last year. On the other hand, the assets denominated in the US dollar, most of which are treasury bonds, continued their steady decline to 46% of the global reserves. Among the factors that threaten to accelerate the decline in the US dollar’s share in the world reserves are the aggravating financial deficit in the United States, the risk of seizure and speculation that foreign creditors can be treated on a less preferred way. All this is in the interest of gold. More than half of the central banks in the emerging economies within the poll indicated that the lack of gold affected by political dangers is one of the main reasons for retaining, while 78% of them state that the absence of the risk of backwardness is also a major motivation. Nevertheless, the situation of the US dollar does not appear to be a dominant reserve that is threatened in the short term. Van said: “Central banks are currently looking at the US dollar and the US bond market with more caution than they do, but I don’t think we have a crazy rush to move away from the dollar completely.”