Brazil adds 53 tonnes of gold to reserves

Brazil has also recently added gold to its reserves. New Figures of the central bank show that the country started buying gold in May and that it added to that in June. In May, it was a purchase of 11.94 tonnes and in June, the country even added 41.8 tonnes of the precious metal to its reserves.

With this purchase, the South American country joins an ever-growing group of countries that buy gold. They do so to protect their reserves from economic and political risk. Unlike currency reserves, the precious metal has no counterparty risk. The precious metal also has a proven track record as a safe haven in times of crisis.

Brazil buys more than 53 tonnes of gold

The chart below shows that Brazil last bought a substantial amount of gold in 2012. With the purchases of recent months, the size of the gold reserve has risen to more than 121 tonnes. At the current market price, this gold reserve represents a value of $7 billion.

In recent years, several central banks have made large purchases of gold. For example, Hungary more than 60 tonnes in March this year, while the central bank of Thailand recently added 90 tonnes of gold to its stockpile. In 2019, Poland made a large purchase of more than 90 tonnes, almost doubling its gold reserves.

Central banks have added a lot of gold to their reserves in recent years. In doing so, they hedge against the risk of currency depreciation and the risk of a 'reset' of the monetary system. This is because the precious metal is solid collateral to build a new financial system.

Brazil Adds gold back to reserves

This contribution comes from Geotrendlines