The report also pointed out that the proportion of US dollar assets in global central bank reserves has dropped to 46%, and the reasons behind it include the expansion of the US fiscal deficit, the risk of asset freezing and geopolitical friction. 78% of respondents from emerging market central banks said that gold's "no default risk" is its attractiveness, and more than half pointed out its "political risk-free" nature.
Global central banks' preference for gold continues to heat up. According to the latest survey jointly released by the World Gold Council and YouGov, 43% of central bank respondents said they will increase their gold reserves in the next 12 months; this is not only higher than 29% last year, but also the highest rate in eight years. The survey also shows that the central bank ratio expected to reduce the US dollar reserves rose simultaneously, reflecting the accelerated spread of the trend of de-dollarization among emerging market countries.
None of the 72 central banks interviewed planned to reduce their holdings of gold, highlighting the risk-averse value and reserve function of gold during turbulent times. Since the outbreak of the Russian-Ukrainian war, gold prices have risen sharply and hit a record high of US$3,500.05 per ounce (about S$4,486) in April this year. The World Gold Council pointed out that the central bank has purchased more than 1,000 tons of gold each year for three consecutive years, which is the largest official gold purchase wave since the 1990s.
World Gold Council said: "Western countries stop selling, emerging market countries are catching up and expanding their gold positions. Although the US dollar and US bonds are still core assets, the central bank is reevaluating allocations more cautiously."