According to a recent survey conducted by the World Gold Council (WGC), 29% of central banks respondents expect to continue increasing their gold reserves over the next 12 months, the highest level since the beginning of the survey in 2018.
Last year, central banks added 1,037 tons of gold to their reserves, the second highest annual net purchase in history after the record increase of 1,082 tons in 2022.
“An increasingly complex geopolitical and financial environment is making gold reserves management more relevant than ever,” WGC analysts say.
The respondents indicated top three reasons to hold gold, including its long-term value at 88%, performance during crisis at 82%, and its role as an effective portfolio diversifier at 76% of respondents. Gold, which is considered a safe-haven asset, is seen as a hedge against geopolitical and economic uncertainty.
According to the WGC, the planned purchases are chiefly motivated by a desire to rebalance to a more preferred strategic level of gold holdings, domestic gold production, and financial market concerns including higher crisis risks and rising inflation.
“What has been remarkable is that, despite record demand from the official sector in the past two years, coupled with climbing gold prices, many reserve managers still maintain their enthusiasm for gold. While influences like price may temporarily slow down purchases in the near term, the broader trend remains in place because managers recognize gold’s role as a strategic asset in the face of ongoing uncertainty,” said WGC central banks global head and Asia-Pacific head Shaokai Fan.
Theodor Lisovoy, Editor in Chief, Rough&Polished
