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Central banks bought 650 tonnes of gold last year, almost as much as the record set a year earlier. Despite the high Gold price several countries continue to expand their gold reserves to diversify their reserves. According to Juan Carlos Artigas of the World Gold Council's research department, this trend will continue this year. In an interview with Kitco he explains the latest figures on the gold market.
"We certainly expect central banks to continue to work on central banks in the near future. Buy gold. The year 2018 was a 50-year record and 2019 was only slightly below that. So 2019 was also particularly strong. A large number of central banks entered the market to buy gold. So this is not a trend that is going away anytime soon. We may not see such huge purchases anymore, as demand has already been particularly strong in recent years.
However, we do see a positive trend. This trend has been going on for a decade. We are seeing more awareness of the role that gold can play in foreign reserves. Central banks often cite safety and diversification as reasons to buy gold. In some ways, gold is a form of wealth that protects long-term reserves."
According to the World Gold Council, we saw a shift in the demand for gold in 2019. Many investors and pension funds were drawn to the precious metal, increasing the stocks of gold ETFs. In fact, at the end of last year, global gold ETF stocks soared to a New record of almost 2,900 tonnes.
Artigas notes that the market for gold ETFs is spreading further into Europe. Ten years ago, this market was dominated by North American funds, but now there are almost as many gold stocks in European funds. With these types of investment products, investors take a share in the underlying asset, in this case it is a stock of physical gold.
Last week, the World Gold Council published its annual report about the gold market in 2019. This showed that there has been a major shift in the gold market in the past year. Due to the rise in the price of gold, the demand for jewellery, coins and bars decreased, especially in Asian markets, while the interest in investing in gold in Western economies increased. Central banks turned out to be the most stable factor, buying gold for ten years in a row.
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This contribution was made from Geotrendlines
