Record Proportion of Central Banks Expect Increased Gold Holdings, Survey Shows

  • Central banks expect global gold reserves to increase over the next year due to pessimism towards the U.S. dollar
  • More than four in five respondents anticipate an increase in bullion holdings, a record high since the annual survey began
  • Nearly 30% of banks plan to add reserves within the next year, including 13% from advanced economies
  • Emerging-market central banks join advanced economy counterparts in viewing gold as a portfolio diversifier and crisis hedge
  • Gold purchases by central banks reached the second highest annual amount in history at 1,037 metric tons in 2023
  • Positive attitude towards gold persists despite record high prices in early 2024

Central banks worldwide are anticipating an increase in global gold reserves over the next year due to pessimism towards the U.S. dollar, according to a new report by the World Gold Council. Over four-fifths of respondents expect reserve managers to boost their bullion holdings, marking the highest proportion on record since the annual survey’s inception. Nearly 30% of banks plan to add to their reserves within the year, including 13% from advanced economies. Emerging market central banks have joined their counterparts in advanced economies in viewing gold as a portfolio diversifier and crisis hedge, with 57% now holding this view compared to 38% in 2023. Meanwhile, advanced economy banks are growing more pessimistic about the U.S. dollar’s share of global reserves. Factors driving central banks towards gold include risk mitigation, long-term value, crisis performance, and portfolio diversification. The dollar has lost favor due to concerns over its weaponization following the 2022 Ukraine invasion and domestic U.S. election uncertainties. In 2023, central banks purchased 1,037 metric tons of gold – the second highest annual amount in history, following 1,082 tons in 2022. Despite record high prices in early 2024, gold futures peaking at $2,448.8 a troy ounce on April 12, the positive attitude towards gold persists as managers recognize its strategic value amid ongoing uncertainty.

Factuality Level: 8
Factuality Justification: The article provides accurate and objective information about central banks’ expectations for increasing global gold reserves and their reasons for doing so, as well as recent gold purchases. It cites a World Gold Council report and includes relevant data on the amount of gold purchased in recent years. However, it could be improved by providing more context on the factors affecting the U.S. dollar and including quotes from experts other than the World Gold Council’s representative.
Noise Level: 3
Noise Justification: The article provides relevant information about central banks’ expectations for gold reserves and their reasons behind it, such as risk mitigation and diversification. It also mentions the decrease in confidence in the U.S. dollar due to political events like the invasion of Ukraine and the upcoming presidential election. However, it could provide more context on how these trends may affect the global economy or offer insights into potential investment strategies for readers.
Public Companies: World Gold Council (null)
Key People: Shaokai Fan (Global Head of Central Banks and Head of Asia-Pacific, World Gold Council), Joseph Hoppe (Not specified)

Financial Relevance: Yes
Financial Markets Impacted: Central banks, gold reserves, U.S. dollar
Financial Rating Justification: The article discusses central banks’ expectations of increasing global gold reserves and their pessimism towards the U.S. dollar, which can impact financial markets and companies involved in these assets.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: Minor
Extreme Rating Justification: There is no extreme event mentioned in the article. The text discusses central banks’ increasing interest in gold reserves due to economic and political uncertainty, but does not describe any major crisis or disaster.

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