According to a survey by the World Gold Council, central banks in many countries around the world view gold as a reserve asset and are likely to increase their holdings of this metal in the next twelve months.
This is mainly due to growing fears of a possible global financial crisis, with central banks in emerging market and developing countries, or about a quarter of respondents, intending to add more precious metals to their reserves. This is an increase compared to 21% in 2021.
Expected changes in the international monetary system and concerns about growing economic risks in reserve currency countries are also important factors, the review says. Add to this rising inflation, monetary tightening and Russian military action in Ukraine, which will further disrupt supply chains and introduce geopolitical uncertainty.
“The geopolitical situation is much more volatile and we don’t know how long this situation will last,” Shaokai Fan, global head of WGC central banks, said in an interview. “What happened is that gold proved its safe haven characteristics in this situation. This is one of the aspects that central banks are considering.”
Emerging-country central banks are optimistic about the future of gold in the international monetary system and are hesitant against the US dollar, Feng said. The survey also showed that the majority of such respondents expect gold to grow in proportion to total stocks in the coming years, while its safe-keeping characteristics and ability to operate during a crisis remain influential.
The survey was conducted from February 23 to April 29, a total of 57 were received
