Central banks to keep buying gold
By Stefan Gleason
The move away from the Federal Reserve Note as the global reserve currency of choice has continued in recent years, with fresh developments increasing the greenback’s stiff competition.
This has led to massive central bank buying of gold, and that trend appears set to continue in 2021. According to a recent report from the World Gold Council, 21% of global central banks plan to purchase gold this year.
Why Do Central Banks Keep Buying?
There are a variety of reasons for central banks to buy and hold gold.
The yellow metal’s reputation as a portfolio diversifier and its role as a safe-haven asset are well known and discussed.
But gold’s ability to improve risk-adjusted returns while also serving as an important form of collateral are less talked about topics that may be just as important.
The World Gold Council’s survey also indicated that no central bank has plans to sell its gold reserves this year, having fallen from a 4% reading last year.
Gold’s strong performance during the Covid-19 epidemic is likely to become the top reason for central bank buying this year.
Here are key reasons why global monetary planners are accumulating gold:
The key takeaway: If gold is being accumulated by the largest, most powerful financial institutions on Earth, shouldn’t you do so also?
Stefan Gleason is President of Money Metals Exchange, the national precious metals company named 2015 "Dealer of the Year" in the United States by an independent global ratings group. A graduate of the University of Florida, Gleason is a seasoned business leader, investor, political strategist, and grassroots activist. Gleason has frequently appeared on national television networks such as CNN, FoxNews, and CNBC, and his writings have appeared in hundreds of publications such as the Wall Street Journal, Detroit News, Washington Times, and National Review.