Central Banks Dump Dollars and Yuan in Favor of Gold
By Yohei Hirose Nikkei
August 10, 2024 12:15 JST
TOKYO -- Central banks are diversifying away from the dollar and yuan while loading up on foreign exchange. Brazil's central bank, meanwhile, has reported that its gold reserve ratio sat at 26% at the end of 2023, up 0.08 percentage points from the previous year.
Central banks in 2022 were also more optimistic on gold as a reserve asset, with 61% of respondents stating that they expect global gold reserves to increase.
Conclusion
The shift away from the dollar and yuan and toward gold is a sign that central banks are increasingly concerned about the long-term stability of the global financial system. Gold is seen as a safe haven asset that can help to protect against inflation and economic downturns. The increase in gold reserves by central banks is a clear indication that they are preparing for a more uncertain future.
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