Banking giant UBS reveals demand for gold from central banks around the globe is very likely surge this year as countries back away from the United 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.
Reports by the financial titan, central banks are likely continuation stockpiling gold in the months ahead owing to persistent inflation and geopolitical concerns.
“ A year 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 banks’ buying of gold greater than doubled from 450 metric tons in 2021. According to the 1Q23 data from the World Gold Council, central banks are on track to buy around 700 metric tons of gold in the year, far greater than the average since 2010 of below 500 metric tons.
We think this tendency of monetary authority buying is very likely continue amid heightened geopolitical dangers and elevated inflation.”
UBS likewise outlines that countries around the globe are now hesitant to increase their United States dollar reserves following the weaponization of the American currency.
A year ago, Russia’s Finance Minister reportedly said that the United States and its allies have frozen $300 Billion worth of the European giant’s gold and foreign exchange reserves as part of the sanctions over the military conflict in Ukraine.
“ In reality, the United 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.”
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