Followers | 681 |
Posts | 141724 |
Boards Moderated | 35 |
Alias Born | 03/10/2004 |
Monday, April 24, 2023 2:21:13 PM
By: Financial Times | April 22, 2023
• Reserve managers’ purchases rose 152 per cent last year and they expect to keep buying
Central bankers who manage trillions in foreign exchange reserves are loading up on gold as geopolitical tensions including the war in Ukraine force them to rethink their investment strategies.
An annual poll of 83 central banks, which manage a combined $7tn in foreign exchange assets, found that more than two-thirds of respondents thought their peers would increase their gold holdings in 2023.
Bullion tends to become more attractive in times of instability, and demand has soared over the past year. The amount of gold bought by central banks rose by 152 per cent year on year in 2022 to 1,136 tonnes, according to the World Gold Council, a trade body.
Most reserve managers surveyed rated geopolitical risk as one of their most important concerns — second only to high inflation — according to the HSBC Reserve Management Trends Survey published by Central Banking Publications.
More than 40 per cent of respondents listed it as one of their top risk factors, compared with 23 per cent in last year’s poll.
Around a third of those polled had changed, or were planning to change, the assets they purchase owing to tensions such as Russia’s invasion of Ukraine and worsening US-China relations.
Víctor Méndez-Barreira, author of the survey, said Russia’s full-scale invasion of Ukraine had created a “factor that reserve managers now need to reckon with”.
The invasion led the western alliance of the US, UK and EU to deploy extensive financial sanctions on Moscow, including measures to freeze around $300bn-worth of Russian central bank assets. The central bank’s gold reserves did not fall under the direct ambit of the sanctions as they were stockpiled in Russia.
World Gold Council figures show many purchases made over the past year have been by central banks in countries that are not aligned with the west.
The People’s Bank of China bought 62 tonnes of gold in November and December 2022, lifting its total bullion reserves above 2,000 tonnes for the first time. Turkey’s official gold reserves rose by 148 tonnes to 542 tonnes over 2022. States in the Middle East and Central Asia were also listed by the council as “active buyers” of gold last year.
John Reade, chief market strategist at the World Gold Council, said the sanctions against Russia’s central bank had “caused many non-aligned central banks to reconsider where they should hold their international reserves”.
He added: “Countries have recognised that the gold that Russia holds, because it’s outside of anybody else’s control, is useful in situations where you might not be able to access any other reserves.”
While Russia’s gold was stored at home, many central banks keep their reserves abroad, including at the Bank of England and the New York Federal Reserve, reflecting London and New York’s status as the biggest gold dealing markets.
Gold was also seen as an effective hedge against high inflation — the number one concern of more than 70 per cent of those polled. The price of bullion is now close to an all-time nominal high, following the surge in inflation over the course of 2022.
The majority of those polled said the renminbi would become a larger share of international reserves over the rest of this decade.
European Central Bank president Christine Lagarde warned in a speech last week that rifts between the US and China threatened the leading positions of the dollar and euro in global reserve management.
According to IMF data, the dollar accounted for 58 per cent of all central bank reserves during the fourth quarter of last year. The euro accounted for a little over 20 per cent, and the renminbi just 2.7 per cent.
The survey took place between February and mid-March 2023.
Read Full Story »»»
DiscoverGold
Information posted to this board is not meant to suggest any specific action, but to point out the technical signs that can help our readers make their own specific decisions. Caveat emptor!
• DiscoverGold
Recent GOLD News
- Form SD - Specialized disclosure report • Edgar (US Regulatory) • 05/29/2024 08:01:04 PM
- Barrick’s Sustainability Strategy Delivers Real Value to Stakeholders • GlobeNewswire Inc. • 05/15/2024 11:00:00 AM
- Barrick Announces Extensive Exploration Partnership with Geophysx Jamaica • GlobeNewswire Inc. • 05/01/2024 10:15:00 AM
- Barrick to Ramp Up Production As It Remains On Track to Achieve 2024 Targets • GlobeNewswire Inc. • 05/01/2024 10:00:00 AM
- Barrick Declares Q1 Dividend • GlobeNewswire Inc. • 05/01/2024 09:59:00 AM
- Barrick Announces Election of Directors • GlobeNewswire Inc. • 04/30/2024 08:15:55 PM
- Barrick On Track to Achieve 2024 Targets • GlobeNewswire Inc. • 04/16/2024 11:00:00 AM
- Notice of Release of Barrick’s First Quarter 2024 Results • GlobeNewswire Inc. • 04/09/2024 11:00:00 AM
- Strategy-Driven Barrick Builds on Value Foundation • GlobeNewswire Inc. • 03/28/2024 09:20:38 PM
- Barrick Hunts New Gold and Copper Prospects in DRC From Kibali Base • GlobeNewswire Inc. • 03/20/2024 02:00:00 PM
- Barrick Opens Academy at Closed Buzwagi Mine • GlobeNewswire Inc. • 03/18/2024 08:00:00 AM
- Barrick to Grow Production and Value on Global Asset Foundation • GlobeNewswire Inc. • 03/15/2024 11:53:01 AM
- Loulo-Gounkoto Delivers Another Value-Creating Performance • GlobeNewswire Inc. • 03/10/2024 10:00:00 AM
- Passing of the Right Honorable Brian Mulroney • GlobeNewswire Inc. • 03/02/2024 01:17:35 AM
- Kibali and DRC Partner to Promote Local Content • GlobeNewswire Inc. • 03/01/2024 02:22:43 PM
- Tanzanian Parliamentary Committee Lauds Barrick’s Work at North Mara • GlobeNewswire Inc. • 02/23/2024 12:00:00 PM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 02/14/2024 10:28:08 PM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 02/14/2024 08:05:25 PM
- Clear Strategies and Strong Partnerships Set Barrick Up to Outperform, Says Bristow • GlobeNewswire Inc. • 02/14/2024 11:00:00 AM
- Barrick Announces New Share Buyback Program • GlobeNewswire Inc. • 02/14/2024 10:59:00 AM
- Barrick Declares Q4 Dividend • GlobeNewswire Inc. • 02/14/2024 10:58:00 AM
- NGM Strongly Positioned for Growth • GlobeNewswire Inc. • 02/10/2024 01:00:16 AM
- Form SC 13G - Statement of acquisition of beneficial ownership by individuals • Edgar (US Regulatory) • 02/08/2024 03:03:08 PM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 02/08/2024 12:46:55 PM
- Geologically Driven Asset Management Delivers Barrick’s Third Successive Year of Reserve Growth at Sustained Quality, While Unlocking Embedded Growth Portfolio • GlobeNewswire Inc. • 02/08/2024 12:00:00 PM
ILUS Provides an Update on the Binding Term Sheet Signed with Actelis Networks (NASDAQ: ASNS) • ILUS • May 31, 2024 12:52 PM
Element79 Gold To Provide Summary and Update on Active Exploration Program, Community Relations at RMEC on June 4 • ELEM • May 30, 2024 1:18 PM
Branded Legacy Secures Exclusive Extraction Partnership with One of the World's Largest Kava Distributors and Producers • BLEG • May 30, 2024 8:30 AM
ECGI Holdings, Inc. Announces $2 Million Debt-to-Equity Conversion • ECGI • May 30, 2024 8:30 AM
North Bay Resources Reports Assays up to >25% Mg, 0.1% Ni, 0.1% Cu, 0.01% Co, 0.3 ppm Pt at Tulameen Platinum Project, British Columbia • NBRI • May 29, 2024 9:03 AM
One World Products, Inc. Issues Shareholder Update • OWPC • May 29, 2024 8:20 AM