Central banks are scrambling to accumulate vast stockpiles of gold as the US dollar's credibility declines amid growing geopolitical tensions and the erosion of traditional economic logic.
The dollar, once the primary reserve currency, has been losing its status as the world's most important asset. In recent years, central banks have been rushing to buy gold, with their share of gold in reserves more than doubling over the past decade to over a quarter, the highest level in almost 30 years.
According to Jorgovanka Tabaković, Serbia's central bank governor, her institution was left with millions of dollars' worth of gold bars at a Swiss airport after they were mistakenly left on the runway. This experience has taught them that fresh flowers, food, and other perishables take priority in air freight, even for high-value bullion.
The increasing demand for gold is partly driven by the soaring price, which reached a record $4,643 (£3,463) an ounce this week, with analysts predicting it could break $5,000 this year. Central banks are also stockpiling gold as an insurance policy in volatile times and to reduce their exposure to the US dollar.
Raphaël Gallardo, chief economist at Carmignac, says, "We have moved from Pax Americana to global discord, geopolitically. It is the law of the jungle when we see what the US are doing." Investors believe that traditional fiat currencies are no longer safe and are turning to gold as a reliable store of value.
According to Invesco's survey of 50 central banks, about half plan to increase their gold allocation, while two-thirds aim to repatriate bullion stockpiles held overseas for safekeeping. Rod Ringrow, head of official institutions at Invesco, notes that "Gold has always been the ultimate safe haven... It's a form of protection and a backstop if traditional fiat currencies fail."
Many central banks are taking a cautious approach, with some opting to repatriate their gold reserves from countries like Switzerland, London, or New York. The Bank of England, for example, holds about 400,000 bars worth more than half a trillion dollars.
Economists point out that the most prominent countries hoarding gold are typically those exposed to geopolitical tensions. China has been on a buying spree, amassing over 2,000 tonnes, while the US is thought to be the world leader with an estimated 8,000 tonnes in its Fort Knox vault.
While some economists speculate about the potential rise of cryptocurrencies as a reserve asset, central banks have shown caution due to security concerns and the fact that many assets are still pegged to the value of gold or the dollar. Jonathan Fortun, an economist at the Institute of International Finance, notes that "I don't think the dethroning of the dollar would be the main concern if we arrived to the stage where we were to be bartering in gold... That would be a second-round effect – we'd have many other issues."
The dollar, once the primary reserve currency, has been losing its status as the world's most important asset. In recent years, central banks have been rushing to buy gold, with their share of gold in reserves more than doubling over the past decade to over a quarter, the highest level in almost 30 years.
According to Jorgovanka Tabaković, Serbia's central bank governor, her institution was left with millions of dollars' worth of gold bars at a Swiss airport after they were mistakenly left on the runway. This experience has taught them that fresh flowers, food, and other perishables take priority in air freight, even for high-value bullion.
The increasing demand for gold is partly driven by the soaring price, which reached a record $4,643 (£3,463) an ounce this week, with analysts predicting it could break $5,000 this year. Central banks are also stockpiling gold as an insurance policy in volatile times and to reduce their exposure to the US dollar.
Raphaël Gallardo, chief economist at Carmignac, says, "We have moved from Pax Americana to global discord, geopolitically. It is the law of the jungle when we see what the US are doing." Investors believe that traditional fiat currencies are no longer safe and are turning to gold as a reliable store of value.
According to Invesco's survey of 50 central banks, about half plan to increase their gold allocation, while two-thirds aim to repatriate bullion stockpiles held overseas for safekeeping. Rod Ringrow, head of official institutions at Invesco, notes that "Gold has always been the ultimate safe haven... It's a form of protection and a backstop if traditional fiat currencies fail."
Many central banks are taking a cautious approach, with some opting to repatriate their gold reserves from countries like Switzerland, London, or New York. The Bank of England, for example, holds about 400,000 bars worth more than half a trillion dollars.
Economists point out that the most prominent countries hoarding gold are typically those exposed to geopolitical tensions. China has been on a buying spree, amassing over 2,000 tonnes, while the US is thought to be the world leader with an estimated 8,000 tonnes in its Fort Knox vault.
While some economists speculate about the potential rise of cryptocurrencies as a reserve asset, central banks have shown caution due to security concerns and the fact that many assets are still pegged to the value of gold or the dollar. Jonathan Fortun, an economist at the Institute of International Finance, notes that "I don't think the dethroning of the dollar would be the main concern if we arrived to the stage where we were to be bartering in gold... That would be a second-round effect – we'd have many other issues."
The idea that central banks are hoarding gold as insurance is kinda believable. I mean, with all the uncertainty and tensions going on globally, it's hard to predict what's gonna happen next. But at the same time, if people start doubting the value of the dollar, it could lead to a lot more than just a rise in gold prices... 
. Meanwhile, China's buying spree is on 
- 2,000 tonnes of gold, no joke 
! As economists say, "A place for everything and everything in its place" (Henry Ford), it seems like central banks want to stash their gold where it'll be safe and sound 
.
The fact that China is buying up so much gold too makes me think there might be some underlying tensions or concerns about the global economy... 
And have you noticed how some people are already talking about bartering in gold? That sounds so... homeschool economics book 
. I mean, who wouldn't want a tangible asset that can't be printed into oblivion? 
. geopolitical tensions are making everyone nervous, and they don't want to risk their reserves being devalued 
. china's gold stockpile is crazy huge 
. what do you guys think? 
. This is basically a 'Pax Americana' to 'global discord' kind of shift in global economics 
.
. It's like they're preparing for the worst, which might just be a good call considering what's happening geopolitically 
.
. But hey, at least it's a form of protection and a backstop if traditional fiat currencies fail... right? 
.
. I mean, who needs stability when you can have a stash of bars in Fort Knox? 
. It's all about diversifying your portfolio and not putting all your eggs in one basket... or should I say, dollar 
so central banks are like, scrambling to buy more gold because they think its value is gonna rise and they wanna be all safe and stuff... but like how much do they know about gold? 
why do central banks have to be so cautious all the time? can't they just let people trade and stuff? 
. The fact that China is amassing a massive amount of gold just shows how serious they're taking this move 
. china's buying up all the gold and now we got the bank of england holding onto 400k bars worth half a trillion dollars 
. i don't get why people are still worried about crypto tho... maybe they just haven't seen the prices of some assets lately 