21% of central banks plan to buy gold this year – WGC
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(Kitco News) – Central banks expect gold to continue to play a significant role in their reserves, according to the latest research from the World Gold Council (WGC).
On Tuesday, the WGC released the results of its fourth annual central bank gold survey, which noted that 21% of central banks plan to increase their gold reserves over the next year, relatively unchanged from to 2020.
The survey also noted that no central bank expects to sell gold this year, up from 4% compared to last year’s survey.
This year, a record 56 central banks participated in the WGC survey, up from 51 in 2020.
“This year’s survey continues to highlight significant interest in gold among central banks, against the backdrop of the COVID-19 pandemic highlighting the importance of maintaining liquid and uncorrelated assets in a portfolio. Inflation has also resurfaced as an investment consideration and may inform the allocation of bank assets in the years to come. We believe central banks will continue to be net buyers of gold, although only at slightly lower volumes than the previous decade, ”WGC analysts said.
Although some central banks are looking to increase their gold reserves this year, the WGC noted that responses show officials are unsure of the global holdings trend.
The WGC said 52% of those polled believe the gold holdings of global central banks will increase in the coming year, up from 75% last year.
While central banks are expected to continue to be net buyers of gold, the WGC said the motivation behind the purchase has changed this year. The performance of gold during the crisis was the main reason for holding gold among 79% of survey participants.
“This factor climbed to first place after coming fourth in 2019 and second in 2020, an increase that may reflect the growing importance central banks are attaching to crisis mitigation and a potential nod. to the strong performance of gold during the pandemic, ”analysts said. .
Other reasons central banks hold gold include its long-term value and its role as a portfolio diversifier.
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