Gold exceeds the euro to become the second largest reserve origin in the world

The purchase of gold increased to record levels, while prices saw that it was sharp leap, which led to the transcendence of the euro to become the second largest reserve origin in the governor of the central banks worldwide. According to an annual evaluation issued by the European Central Bank regarding the worldwide position of the euro, the share of gold in global foreign reserves, according to market prices, reached about 20% by the end of 2024, which bypassed the euro, whose share dropped to 16%. On the other hand, the US dollar continued its gradual decline to 46% of the total global reserves. The remarkable increase in the value of gold, which has doubled since the end of 2022, was partially driven by intensive purchases by central banks. The volume of purchasing sovereign institutions has exceeded 1000 tonnes annually over the past three years, ie the average purchase rate before 2022. Therefore their possession of gold returned to levels not recorded since the late seventies of the last century. You may also be interested in: China is still raising its gold reserves amid the high prices of gold demand. The European Central Bank Report said “the demand for gold for the reserves of central banks was a big leap after the comprehensive Russian war against Ukraine in 2022, and until now is still high.” The western step by freezing Russia’s foreign currencies reserves, the currencies of the group of seven, after the war against Ukraine, urged many central banks to reduce their exposure to the Western financial system, which was also reinforced by inflation and speculation fears about the possibility of the united states to withdraw from the treatment of foreign creditors. Historically, gold prices are negatively related to real returns, as investors through the high returns by investors are tempted by moving away from gold that does not benefit. However, according to the European Central Bank report, this link collapsed in 2022; Where the central banks went to buy the yellow metal to hedge against the risks of fines, despite the high interest rates worldwide. European experts in the central bank wrote: “Countries have seen geopolitics with China and Russia since the last quarter of 2021.