Central Banks Flock Home for Gold Amid Global Unrest

Central banks are buying and moving more gold than ever before, according to the World Gold Council. In just two years, 59% of central banks worldwide have switched from keeping their gold in foreign vaults to storing it domestically. This shift is largely driven by concerns over the stability of regulatory environments, particularly under President Donald Trump's administration.

Several European countries have already relocated or are under pressure to relocate their gold reserves from New York, where they were traditionally stored with the Federal Reserve Bank. The Netherlands has moved 86 tons of its gold from US vaults to London, while France completed a repatriation project that began in the 1960s by selling 129 tons of gold bullion held in New York and purchasing new bars in Paris.

India, which holds around 77% of its total gold stash in Mumbai and Nagpur, has also carried out one of the largest gold repatriations since 2022. Carsten Menke, a researcher at Julius Baer, attributes this trend to the war in Ukraine, saying it is 'the main factor that has caused the change in gold's role as a geostrategic asset.'

The price of gold has soared by 140% over the last three years, and central banks have purchased a record 289 tons in the second quarter alone. The European Central Bank reports that gold now accounts for 27% of total reserve assets, surpassing US Treasury bonds.