World Gold Council: Central banks around the world, including the Reserve Bank of India, the regulator of the banking sector in India, have purchased 1037 tonnes of gold in the year 2023, which is the second largest purchase after 1082 tonnes purchased in 2022. This increase in the demand for gold is being seen due to tension and financial instability around the world.
The World Gold Council said in its report, this record purchase of gold indicates that gold is the best reserve asset for central banks and in the next 12 months these central banks are planning to buy more gold, due to which there is a possibility of further rise in gold prices.
Central banks will buy more gold
The World Council has released the 2024 Central Bank Gold Reserves Survey, which was conducted between 19 February and 30 April 2024. This survey has received responses from 70 central banks, in which 29 percent of central banks said that in the next 12 months they will buy more gold and increase their gold reserves. This is the second high level since this survey started in 2018 when such a large number of central banks are talking about increasing gold reserves.
If we look at the reasons for the planned purchase of gold by the central banks, then the central banks are strategically increasing gold holdings in view of domestic gold production, concerns of financial markets in view of higher risk and rising inflation.
81 percent of central banks will increase gold reserves
According to the survey, 81 percent of the 69 central banks participating in the survey said that the gold reserve would increase while 19 percent said that there would be no change in it. In 2023, 71 percent of central banks had talked about increasing gold reserves. While 69 percent of central banks said that the share of gold in the total foreign exchange reserves will increase in the next five years. RBI is among the top five central banks in the world in terms of gold purchases.
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