As a seasoned researcher with decades of experience in global financial markets, I find the current trend of central banks piling up gold reserves quite intriguing. The record-breaking net gold purchases by these institutions this year is a stark reminder of the enduring appeal of gold as a safe haven during turbulent times.
In the midst of economic turmoil worldwide, central banks have been building up their gold reserves significantly this year in 2024, reaching record highs. According to a recent article published on Monday, September 2, by the well-known macro outlet Kobeissi Letter, global central banks’ net gold acquisitions surged to an astounding 483 tonnes during the first half of 2024.
This figure is 5% higher than the previous record of 460 tonnes, set last year in the first half of 2023. During the second quarter of this year, the central banks accumulated a staggering 183 tonnes of gold, surging by 6% year over year.
NEW REPORT: In the first six months of 2024, global central banks have bought a record-breaking 483 tons of gold, marking the highest amount they’ve ever purchased.
This is 5% higher than the previous record of 460 tonnes set in the first half of 2023.
In Q2 2024, central banks bought 183 tonnes of gold, marking a 6%…
— The Kobeissi Letter (@KobeissiLetter) September 1, 2024
Among central banks worldwide, the National Bank of Poland, the Central Bank of Turkey, and the Reserve Bank of India are actively buying gold and are currently among those holding the most gold in their reserves. Recently, the head of the National Bank of Poland, Adam Glapinski, declared that they will continue to acquire gold with the aim of raising its portion to 20% within the country’s total reserves.
Alternatively, this gold amassing could be a move towards strategic de-dollarization. As stated by Spencer Hakimian, founder of Tolou Capital Management, these countries – China, India, Russia, and Saudi Arabia – no longer have confidence in holding Western reserve assets. He underscores the fact that gold stands out as the sole impartial and stable reserve asset.
BRICS Working on a Gold-Backed Stablecoin
The group of BRICS countries is currently developing a stablecoin, rumored to be backed by gold. Besides the initial BRICS members, nations like Iran, Egypt, Ethiopia, and the United Arab Emirates have expressed interest in this venture. As more parties join, there may be an increased desire for this asset. Notably, entrepreneur Kim Dotcom foresees the potential demise of the US dollar.
“If the BRICS issue their gold-backed stablecoin, it could significantly reduce trade in U.S. dollars and lead central banks to abandon the dollar. This might expose the U.S.’s money printing practices as unsustainable. By 2030, it’s estimated that approximately 14% of global GDP could move from the U.S. economy to other nations, marking a potentially rapid and unprecedented economic decline for the U.S., comparable to the fall of any previous empire.”
Due to an unprecedented buildup, gold, known for its golden hue, has experienced record-breaking gains, increasing by approximately 23% from the start of 2024 until now. Nevertheless, Bitcoin has outperformed gold significantly, soaring by a striking 37% during the same timeframe.
As we’ve reached August in the year 2024, it’s worth noting that all of Bitcoin’s growth for the year took place during January and February. Since February ended, even with the introduction of 11 Bitcoin Exchange Traded Funds (ETFs), Bitcoin has dropped by 8%. In contrast, over the past six months, the price of gold has increased by 23%. It appears that the trend for these assets is shifting.
— Peter Schiff (@PeterSchiff) September 1, 2024
In contrast to the volatile global financial landscape, Bitcoin’s performance over the past three months has been relatively weak compared to gold, which has continued its gradual climb.
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2024-09-02 15:53