Central Banks Fuel Gold Demand Amid Waning Trust in Government Data

Josh Phair, CEO and owner of Scottsdale Mint, has observed that gold is taking on the characteristics of a trustless asset. He stated that people have lost confidence in government-issued data from any country and in one another when it comes to trade, prompting a move towards an asset that doesn't depend on that trust.

Phair described a change in buying behavior, with well-established investors and even businesses placing gold on their balance sheets and then borrowing against it. He attributed the main driver of this trend to central banks, noting that China has purchased gold for 22 consecutive months and bought heavily during a recent price dip.

Institutions holding little or no gold are weighing allocations of 1% to 3%, while those already at 1% to 3% are considering 5% to 7%. Poland is aiming for the upper 30% range by the end of the year, according to Phair.