MIAMI (Reuters) – Central banks stay eager patrons of gold to diversify their reserves for monetary or strategic causes, representatives of three central banks advised the London Bullion Market Affiliation’s annual convention in Miami on Monday.
Elevated demand for gold from central banks underpinned the value of the non-yielding gold when the worldwide rates of interest had been excessive in 2022-2023 after which slowed down with this yr’s 28% value rally. China’s central financial institution held again on shopping for gold for a fifth straight month in September.
Regardless of the gold rally, representatives of central banks of the Czech Republic, Mongolia and Mexico advised the convention that having gold in reserves nonetheless issues to them, although every certainly one of them has their very own reasoning.
The significance of gold as a safe asset is rising for Mongolian reserves, Enkhjin Atarbaatar, head of the monetary markets division on the Central Financial institution of Mongolia, advised the convention.
For the Czech Nationwide Financial institution (CNB), gold is seen as a pure diversifier of reserves, Marek Sestak, deputy govt director of the chance administration division on the CNB, mentioned.
All three mentioned that they weren’t at the moment lively in gold derivatives and that London remained the primary storage location for his or her gold as a buying and selling hub, whereas solely Mongolia had restricted urge for food for repatriation of gold to retailer it at residence.
World central banks elevated purchases for his or her reserves by 6% to 183 tons within the second quarter, in line with the World Gold Council, and are on observe to sluggish shopping for in full 2024 by 150 tons from 2023.
