Central Bankers Reaffirm Gold’s Reserve Status Amid Rising Yields

Gold continues to hold its place as a key reserve asset, despite rising bond yields, according to central bankers speaking at the London Bullion Market Association’s annual conference in Sorrento, Italy. The metal’s safe-haven appeal remains strong amid growing concerns over government debt and geopolitical instability, even as prices have fallen around 4% this year due to surging U.S. Treasury yields.

Sergio Nicoletti Altimari, deputy governor of the Bank of Italy, emphasized gold’s role as a safe-haven asset, particularly in today’s high-risk environment. Meanwhile, Bundesbank President Joachim Nagel acknowledged that rising yields make bonds more attractive but noted that gold’s diversification benefits are still crucial given persistent geopolitical tensions and credit risks from high debt levels.

Analysts point out that central bank buying and safe-haven demand have helped maintain gold prices above $4,000, despite the yield-driven decline. Altimari highlighted a structural shift in the gold market since 2022, driven by central-bank purchases in emerging economies and concerns over public debt and fiscal expansion, which have weakened gold’s traditional inverse relationship with real bond yields.

In China, the top gold consumer, demand is increasingly being driven by investment and institutional investors, with bar-and-coin purchases expected to surpass jewelry consumption for the first time in 2025. This shift reflects profound changes in the gold market’s demand structure and pricing framework in recent years.