Gold has surpassed the euro as the second-largest global reserve asset, with central banks now holding 20% of reserves in gold, up from 16% in euros. This shift is driven by geopolitical tensions, inflation, and concerns regarding the stability of traditional currencies. Since Russia's invasion of Ukraine, gold is increasingly seen as a hedge against economic and political instability, with historical demand levels nearing those of the postwar period. The ECB highlights gold's role as a portfolio diversifier amid growing economic risks.
Gold is valued by reserve managers primarily as a portfolio diversifier to hedge against economic risks, including inflation, cyclical downturns and defaults, and secondly as a hedge against geopolitical risk.
Central banks worldwide now hold 20% of their official reserves in gold, up from previous years, while euro-denominated assets account for just 16%.
Collection
[
|
...
]