Central Banks see Stability in Gold, Preferring It to the Dollar

Institutions responsible for managing foreign exchange reserves value gold for its resilience in times of crisis. They regard the precious metal as effective protection against high inflation and a means of diversifying their assets. Consequently, they have no intention of discontinuing purchases of gold in the near future.

Over the past three years (2022–2024), central banks around the world purchased at least one thousand tonnes of gold annually. Compared with the previous decade, demand from this group of institutions has risen by 100 per cent. Central banks declare that they will continue buying gold in both the near and more distant future. According to experts, this is one of the main reasons why they forecast a continuation of the upward trend in this market. What motivates central banks to invest in this precious metal?

Why do central banks value gold?

One answer to this question is provided by an annual survey conducted among representatives of central banks by the World Gold Council (WGC, an international association whose members include the largest gold producers and firms involved in the gold trade), in cooperation with the market research and polling company YouGov. The most recent, ninth edition of the survey was completed by 73 institutions, a record number that also reflects the growing interest of central banks in gold.