World’s central banks continue to keep faith in gold despite sky-high prices
Global central banks currently hold some 1.16 billion ounces of gold that are collectively worth in excess of US$3 trillion, according to fresh data by the International Monetary Fund (IMF). The precious metal – which the late British economist John Maynard Keynes once famously dubbed a “barbaric asset” – now accounts for just under a fifth of the total US$15.45 trillion worth of gold and foreign exchange reserves held by the world’s central banks.
The IMF data shows that while the US dollar’s share has fallen steadily during the past decade, the greenback remains the prime reserve asset. The US dollar accounts for US$6.7 trillion, or 43 per cent of gold and foreign exchange reserves.
Coming in at a distant second place is gold (19.8 per cent), followed by the euro (14.7 per cent), the Japanese yen (4.2 per cent), the British pound (3.7 per cent), the Canadian dollar (1.9 per cent), the Australian dollar (1.7 per cent) and the Chinese renminbi (1.6 per cent).
Gold’s share in central bank reserves has risen because central banks have bought 305 million ounces in the past 15 years. The price soared to an all-time peak of US$2,685 an ounce in September, and it has only slipped slightly to US$2,653 as at Monday (Oct 7) evening.
Volatile price
With the price of gold being exceedingly volatile, analysts say that gold’s proportion in global central bank reserves is expected to fluctuate in the coming weeks.
Source: https://www.businesstimes.com.sg/