Central banks worldwide are increasing their gold reserves due to rising interest rates to combat inflation

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Apr 05, 2023, 11:00 ET

LOS ANGELES, April 5, 2023 /PRNewswire/ -- Gold has always been a popular safe haven investment and hedge against inflation for central banks to diversify their portfolios and mitigate economic volatility. However, the current surge in central bank gold purchases is unprecedented reports Orion Metal Exchange.

According to the World Gold Council, central banks bought a record 273 tonnes of gold in the first quarter of 2023, representing a 39% increase from the same period in the previous year. In addition, there has been a significant increase in central bank purchases of silver, with several countries such as Russia, China, and Kazakhstan stockpiling silver as a strategic asset.

Due to rising interest rates, which have caused downward pressure on treasuries, bank closures worldwide have led to central banks seeking alternative ways to secure their assets. Central banks understand that physical gold and silver are viewed as secure stores of value. Precious metals are considered safe haven assets and are historically viewed as a hedge against inflation.

The recent surge in gold and silver purchases by central banks reflect the necessity for investors to properly diversify their portfolios by owning physical precious metals. Central banks are expected to continue purchasing gold and silver to diversify their portfolios and protect their assets in an uncertain economic environment.

Moreover, the increased purchases of both metals by central banks are also expected to have a positive impact on the overall demand for gold and silver. Orion Metal Exchange, CEO Jacob Blalock says, "With central banks buying record amounts of gold and silver, savvy investors will follow suit, further driving up the demand for precious metals."

In conclusion, central banks' increase in gold reserves is driven by economic uncertainty and concerns about inflation. Gold and silver are seen as safe haven assets that offer diversification and protection against inflation. This trend is expected to have a positive impact on the overall demand for gold and silver, making it an attractive investment option for both central banks and other investors.

Orion Metal Exchange
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Phone Number: 877-420-1682
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SOURCE Orion Metal Exchange