Central Bankers Affirm Gold’s Safe Haven Role Amid Rising Yields

Gold remains a crucial reserve asset despite rising bond yields, according to two central bankers speaking at the London Bullion Market Association’s annual conference in Sorrento, Italy. Sergio Nicoletti Altimari, deputy governor of the Bank of Italy, emphasized gold’s role as a safe haven asset, particularly relevant in today’s environment of high geopolitical risk and economic fragmentation. Bundesbank President Joachim Nagel acknowledged that rising yields make bonds more attractive but stressed the importance of diversification into gold due to continued geopolitical stress and credit risks from high debt levels.

Altimari noted a structural shift in the gold market since 2022, driven by central bank purchases in emerging economies. Demand has also been supported by concerns over high public debt and fiscal expansion, weakening gold’s traditional inverse relationship with real bond yields. Despite a projected 15% slowdown in central bank gold demand by 2026, it is expected to remain above pre-2022 levels.

Zeng Hui, vice president of the Shanghai Gold Exchange, highlighted profound shifts in the gold market’s demand structure and pricing framework. In China, the top gold consumer, investment demand and institutional investors are now driving the market, with bar-and-coin purchases surpassing jewelry consumption for the first time in 2025.