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On Tuesday, May 6, in Aretsz, Italy, an employee has a gold grate at the ITALPRESIOSI SPA refineries.
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The growing appetite of the Central Bank to gold meant that precious metal was the second largest reserve asset in 2024, according to the European Central Bank on Wednesday, but analysts believe that some institutions may approach them.
The golden reserves of the central banks are close to the level, which was last seen in the 1960s. In conjunction with the rising price of gold, this is now the second only to the US dollar, since their largest content in value conditions, ECB – Note In its analysis on Wednesday.
In 2023, gold and euro were about 16.5%on average, as a share of global official stocks, the ECB data showed. In 2024, it moved to 16% for the euro and 19% for gold – the US dollar is 47%.
Central banks are gaining liquid assets such as foreign currency and gold as heding from inflation and diversification of their possessions. It also allows them to sell these reserves to support their own currency during stress. In particular, gold shows that it provides long-term value and stability through volatility, and the central banks now make up more than 20% of its world demand than about a tenth in the 2010s.
The ECB noted that the survey found that gold became more attractive to developing countries, and are concerned about sanctions and potential erosion of the role of major currencies in the international monetary system.
Over the past few years, gold prices have set a line of fresh records, including in 2025. In recent months, a stunning action has turned into flexion as the world markets have been killed, quickly changing tariffs in the US.
The turning point for precious metal came in the time of full invasion of Russia in Ukraine in February 2022, which, combined with inflation spikes and expectations of raising interest rates, pushed a flight to the so -called safe shelter assets. Since then, geopolitical and economic uncertainty has remained elevated.
Note the gold futures.
China was a leading driver of a gold rally, and India and Turkey among other major buyers.
The rally will continue?
Many tail winds that move gold are still remaining.
“Investors must provide a portfolio diversification and contain sufficient gold and hedge -facing exposition,” Mark Hepel, Chief Investment CEO in UBS Global Wealth Management, advised customers in the note last week.
But there are signs that the Central Bank purchases can cool in the coming months.
The institutes “played a key role in the gold rally and will probably continue to buy gold, albeit slower than the last couple of years,” said CNBC Hamad Hussein, climate and commodity economics.
“Indeed, the perception of gold as hedge against the global fiscal, inflation and geopolitical risks maintains the Central Bank reserves’ case to highlight their portfolio to gold. Recent doubts about the security status of both gold and reserve companies in the coming years.”
In the first three months of the year, the Central Bank’s gold rate rate decreased by 33% by a quarter According to the World Council of Gold Analyzed Bank Ing, and Chinese purchases slowed.
“Despite the slowdown, the central banks are likely to continue to add gold to their reserves, given the still economic environment and the desire for dollar dollar. Over the last six months last month, the volumes have risen by 30 tons,” said Ewa Manthey strategist.
According to the ECB’s own report, the influence of geopolitics and demand for gold prices will “depend on the sticky gold reserves.”
“It was claimed that the supplies of gold reacted elastic to the increase in demand in the last decades, including at the expense of strong growth in terrestrial actions,” the statement reads.
“Thus, if the story is a guidance, a further increase in the official demand for gold can also maintain further growth of global supply of gold.”
