Central Banks Boost Gold Reserves at Record Pace

Gold has been a safe-haven asset for centuries, widely used as a store of value and medium of exchange. Currently, its shine and usage in jewelry are just two aspects of its appeal. In turbulent times, investors consider Gold a good investment due to its lack of reliance on any specific issuer or government.

Central banks hold the largest amount of Gold, with their reserves often seen as a measure of trust in a country's solvency. In 2022, central banks added 1,136 tonnes worth around $70 billion to their reserves, the highest yearly purchase since records began. This is particularly notable among emerging economies like China, India, and Turkey.

The price of Gold has an inverse correlation with the US Dollar and US Treasuries, both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, allowing investors and central banks to diversify their assets in turbulent times. However, a strong Dollar can keep Gold prices under control.