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Central banks around the world have placed big bets on gold in 2022. Central banks bought 1136 tons of gold in 2022, worth about $70 billion. This was announced by the World Gold Council (WGC). The World Gold Council says this is the highest gold purchase by central banks in a year since 1967.
That’s why central banks like gold
The current attitude of central banks towards gold is very different from that of the 1990s and 2000s. Back then, the central banks of Western Europe sold thousands of tons of gold that was stored in their vaults. European banks stopped selling gold after the 2008/09 financial crisis. Many emerging markets, including Russia, Turkey and India, started buying gold. Central banks love gold because, unlike currencies and bonds, it is believed to hold its value in tough times.
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Gold offers you the possibility of diversification
Central banks are also given the opportunity to diversify from gold. Krishnan Gopal, an analyst at the World Gold Council, says, “This trend is now ongoing among central banks.” The central banks of Turkey, China, Egypt and Qatar say they have been buying gold over the last year. The World Gold Council says about two-thirds of the gold central banks bought last year was not made public. The central banks of China and Russia have not regularly reported changes in their gold holdings. The World Gold Council says 2022 levels in terms of gold purchases are unlikely to be reached in 2023.
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