Central Banks Fuel Gold Buying Spree Amid Interest Rate Hikes

Central banks have signaled their intention to increase their gold reserves in the coming years. A recent survey by the World Gold Council found that 89% of central banks expect global central-bank gold reserves to rise over the next 12 months, with a record 45% expecting their own institution to buy more.

The sell-off in gold prices may be a short-term issue due to higher interest rates, but central banks are not concerned about what the Fed might say soon. They're restructuring their reserves for a future that may look different in five or ten years. Goldman Sachs expects central banks to buy an average of 50 tonnes per month this year, nearly three times the pre-2022 pace.

The SPDR Gold MiniShares Trust (GLDM) is one way to invest in physical bullion, holding $32 billion in assets and charging a low expense ratio of just 0.10%. GLDM has been consolidating for most of this year, which may have worked off froth and left it positioned for its next big move.