Central Banks Seek Secure Gold Storage Amid Diversification Push

Goldman Sachs has published a report that highlights the growing concern among central banks about where to store their gold reserves. The bank notes that London and New York remain the preferred locations due to their liquidity and financial infrastructure, but reserve managers are increasingly hesitant to rely on a single foreign custodian.

The World Gold Council's survey shows that 57% of respondents prefer the Bank of England as their custody location, but central banks are diversifying their gold storage. Central banks have added 57 tonnes of gold in OTC markets operating in London and Switzerland, with China buying the majority of it.

The report also notes that investor purchases have picked up again, driven by fading fears of Fed rate hikes. This has contributed to the recent rally in gold prices since mid-July.