Central Banks Make Record $15.7B Gold Purchases
Central banks purchased more gold in the first six months of 2019 than any other time in almost two decades, according to first-half data released by the World Gold Council (WGC).
The financial regulators, led by countries with strong anti-U.S. sentiment including Poland, China and Russia, bought a record 374 tonnes of gold worth $15.7 billion – the largest acquisition of gold recorded by the WGC in its 19 years of data, Financial Times reported.
Gold, seen as a safe-haven asset for fearful investors, is expected to gain from a confluence of economic and geopolitical events that could weaken the dollar. This includes the likelihood that the Fed and the European Central Bank could start easing their policies to counter a global economic slowdown.
This demand for gold is expected to push its price beyond $2,000 by the end of the year.
“Government’s around the world are becoming increasingly wary of the dollar’s hegemony in international trade,” Scott Moore, CEO at EuroSun Mining told Yahoo Finance.
“And they’re doing their best to distance themselves from it by using their gold reserves to buy more gold instead.”
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In 2018, central banks across the world bought more gold than ever since the end of the gold standard (when countries pegged the value of their currency to the precious metal) in 1971, FT reported.
Central banks purchased nearly 70 percent more gold during the first quarter of 2019 than they did during the previous year’s corresponding period. That’s the most they bought since the first quarter of 2013, according to WGC.