Banking giant UBS reveals demand for gold from central banks aroundย theย globe isย veryย likely surge this year as countries back away from the Unitedย States dollar.
In a new report, UBS says it expects central banks to accumulate 700 metric tons of gold worth $48.74 Billion this year.
Reportsย by the financial titan, central banks are likely continuation stockpiling gold in the monthsย ahead owingย to persistent inflation and geopolitical concerns.
โ Aย yearย ago marked the 13th consecutive year of net gold purchases by worldwide central banks and the highest level of annual demand on record dating back to 1950.
At 1,078 metric tons in 2022, central banksโ buying of gold greaterย than doubled from 450 metric tons in 2021. Accordingย to the 1Q23 data from the World Gold Council, central banks are on track to buy around 700 metric tons of gold inย theย year, farย greater than the average since 2010 of below 500 metric tons.
We think this tendency of monetaryย authority buying isย veryย likely continue amid heightened geopolitical dangers and elevated inflation.โ
UBS likewise outlines that countries aroundย theย globe are now hesitant to increase their Unitedย States dollar reserves following the weaponization of the American currency.
Aย yearย ago, Russiaโs Finance Minister reportedly said that the Unitedย States and its allies have frozen $300 Billion worth of the European giantโs gold and foreign exchange reserves as part of the sanctions over the military conflict in Ukraine.
Reveals UBS,
โ Inย reality, the Unitedย States decision to freeze Russian foreign exchange reserves in the aftermath of the war in Ukraine may have led to a longstanding impact on the behavior of central banks.โ
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