Gold Replaces US Treasuries as Safe Haven of Choice

Central banks and ultra-high-net-worth individuals worldwide accelerated their gold purchases in Q2, signaling a shift toward gold as a safe-haven asset over U.S. Treasuries.

The World Gold Council reported that central banks' net gold purchases reached 288.9 tonnes in Q2, a 4.1-fold surge from 56.5 tonnes in Q1, while ultra-high-net-worth individuals increased their net gold purchases by 34% to 327.1 tonnes.

U.S. Treasuries are losing investment appeal due to record-high yields and concerns over widening fiscal deficits. The World Gold Council data shows that gold's share of total foreign exchange reserves held by central banks worldwide reached 27%, surpassing the 22% allocation to U.S. Treasuries.

The Bank of Korea invested $250 million in overseas-listed gold ETFs during Q2, marking its first time acquiring gold-related assets since 2013. Global gold ETFs saw net inflows of $18 billion in August, the second-largest monthly figure on record.