The World Gold Council released a new report this week entitled “Central bank diversification strategies – rebalancing from the dollar and the euro”. It is well worth a read.
Gold has a long history as a reserve asset for central banks, and as such is considered a traditional one. Gold is statistically uncorrelated with other traditional reserves and new alternatives, making it one of the most important assets for diversifying out of the US dollar and euro. In line with this trend, central bank gold buying in the fourth quarter of 2012 marked the eighth consecutive quarter of net purchases by the official sector and the highest level since 1964.
Ashish Bhatia, Manager for Government Affairs at the World Gold Council said:
“Building gold reserves in tandem with new alternatives is an optimal strategy as central banks remain under-allocated to gold and many attractive alternatives are either too small or, as is the case with the renminbi, not yet open to broader international participation.
“Gold has a deep and liquid market with no credit risk, making it one of the most attractive assets for central banks to consider as they diversify away from the US dollar and euro. Gold’s tail-risk hedging properties add to its appeal as a particularly valuable component of a diversified reserve portfolio.”
Continue Reading and Download the Full Report Here
Central Banks’ Diversification into Gold
The World Gold Council released a new report this week entitled “Central bank diversification strategies – rebalancing from the dollar and the euro”. It is well worth a read.
Continue Reading and Download the Full Report Here