Central Banks Rush to Buy Gold Amid Rising Geopolitical Risks

Central banks in various countries have begun purchasing gold as its price has stabilized after reaching its historical peak. China's central bank, the People's Bank of China, has significantly increased its gold reserves by 480,000 ounces to 75.44 million ounces in June.

This is the largest increase in about two and a half years since October 2023 when China's gold purchases were at their highest, with the price of gold around $2,000 per ounce.

Experts attribute the increased demand for gold to rising geopolitical risks, global uncertainties, and falling confidence in the dollar. China is seen as accelerating its strategy to de-dollarize and strengthen the yuan's position by increasing its gold holdings.

Korea has also decided to buy gold for the first time in 13 years, with the Bank of Korea planning to set up a cooperative system with domestic producers to purchase domestically produced gold. This move is seen as an effort to secure gold in won without using foreign currency and reduce geopolitical risks by dispersing storage sites.