Central banks buy 1,000 tonnes of gold over three years, diversifying assets other than dollars as geopolitical unrest grows
사진 확대 Gold Bar. Reuters Yonhap News
Gold has overtaken the euro as the world’s second-largest reserve asset. The move comes as central banks around the world increase their gold reserves as geopolitical instability intensifies due to the Russia-Ukraine war and U.S. President Donald Trump’s capricious tariff policy. The No. 1 reserve asset is still the dollar.
The Financial Times (FT) reported on the 11th (local time) that gold accounted for 20% of the world’s official central bank holdings as of last year, citing the European Central Bank (ECB) report. The euro was 16% and the dollar was 46%.
Central banks are accumulating gold at a very high rate. It bought more than 1,000 tons of gold for the third consecutive year from 2022 to last year. This is equivalent to 20% of the total annual production of gold. It is twice as large as annual production in the 2010s.
According to the ECB, global central bank gold reserves peaked at 38,000 tons (t) in the mid-1960s and then increased again, reaching 36,000 tons again last year. It is about the same level as 1965.
The FT said, “The gold reserves of central banks around the world are approaching the highest level since the Bretton Woods system, which was established in 1944. The Bretton Woods system is a financial order created by countries around the world with the aim of promoting economic stability and cooperation. The World Bank, the International Monetary Fund (IMF), and the International Exchange Rate System were born at this time.
The recent sharp rise in gold prices is one of the reasons why foreign exchange reserves around the world have increased their share of gold. Last year alone, it rose 30 percent. The FT said, “The gold reserves of central banks around the world are approaching the highest level since the Bretton Woods system, which was established in 1944. It hit an all-time high of $3500 an ounce on April 22.
As geopolitical instability and concerns over U.S. debt levels grow, global central banks have sought to diversify their assets away from the dollar. This trend has accelerated, especially in developing countries. The main buyers of gold are India, China, Turkey, and Poland.
Last year, a survey of 57 central banks around the world that held gold showed they had increased their gold reserves mainly to worry about sanctions, prospects for changes in the global monetary system and weaken their dependence on the dollar.