Persistent high inflation, geopolitical instability, and a desire to strategically diversify resource holdings were among the top reasons cited by central banks on why gold will continue to be a favored reserve asset in 2024 and beyond, a survey by an industry trade group found.
The results of the 2024 Central Bank Gold Reserves Survey, released this week by the World Gold Council, showed that geopolitical challenges and the unpredictable financial environment are making gold reserves management more relevant than ever.
Formed in 1987, the WGC is a London-based international trade association that aims to educate and foster trust about the industry and stimulate and sustain demand for gold through market development.
Last year, central banks added 1,037 tons of gold to their reserves – the second-highest annual purchase in history – following a record high of 1,082 tons added in 2022, the WGC noted.
The gold reserves survey, which was conducted between February and April and included 70 responses, found that 29% of central banks planned to increase their gold reserves over the next year – the highest level the WGC has tracked since it began the survey in 2018.
Banks cited nearly a dozen reasons for upping their gold acquisitions in the near term, but the top three were interest rate levels, concerns over inflation and geopolitical instability.
In midday trading Thursday, gold was up $26.58 at $2,356 per ounce.
