The gold stocks of the global central bank rose to 36,000 tons in 2021, increase due to the decline in the dollar - Economics

Von Krypto News Österreich

Loading =

The total amount of gold that the central banks keep in the reserves exceeds 36,000 tons for the first time since 1990, as data from the World Gold Council show. This increase follows the growth of the stocks registered by the banks by 4,500 tons in the past ten years.

The decline in the dollar is a blessing for gold

The gold reserves of the central banks first rose to a new high of 36,000 tons in September 2021. According to World Gold Council (WGC), the gold stock of the central banks rose to 31 -year high after the institutes had successfully added 4,500 tons of the precious metal in the past ten years.

In a Published by nikkei asia, the WGC leads the growing Preference of the central banks for gold back to the decline in the US dollar. The report explains how the significant loosening of the monetary policy of the US Federal Reserve has led to an increased range of US dollars. This increase in the dollar offer has in turn led to the fact that the value of the dollar compared to gold has dropped sharply in the past ten years, the report says.

In order to support the theory that central banks are increasingly choosing gold, the report refers to Poland, whose central bank probably bought around 100 tons of gold in 2019. Regarding the gold purchase by the Polish National Bank (NBP), the President of the Institution, Adam Glapinski, is quoted in reports in which it is pointed out that the precious metal is not directly bound to the economy of a nation and this enables it to endure global unrest in the markets.

gold free of counterparty risks

gold is not only relatively immune to violent changes in the financial markets, but is also generally considered free of credit and counterparty risks. According to the report, this is one of the reasons why Hungary increased its gold reserves to over 90 tons.

The report also indicates that central banks in emerging countries try to limit or reduce their dependence on the dollar. In addition, these central banks build their gold reserves to limit the commitment of their respective economies to their derogatory currencies.

Before 2009, many central banks preferred to increase their stocks on dollars, such as US state bonds, with revenue from gold sales. After the 2008 financial crisis, which led to the outflow of funds from US state bonds, confidence in the US dollar has decreased, according to the report.

As the September data suggested by WGC, gold becomes an instrument of central banks again to protect their assets.

What is your opinion on this story? Tell us your opinion in the comments below.

Terence Zimwara

Terence Zimwara is an award -winning journalist, author and author in Zimbabwe. He wrote in detail about the economic problems of some African countries and how digital currencies Africans can offer an escape route.












Bedy verification : Shutterstock, Pixabay, Wiki Commons