PRECIOUS METALS | Central Banks Plan to Increase Gold Holdings Over Next 12 Months, WGC Says

The World Gold Council (WGC) said on Tuesday that 45% of the central banks it surveyed expected to increase their gold holdings over the next 12 months, up 2 percentage points from a year earlier. According to Jin10, in the WGC’s annual survey conducted from February 5 to May 19, 54% of 74 central banks said their gold holdings would remain unchanged, while 1% expected holdings to decline. The WGC said most responses were received after a Middle East conflict broke out in late February, which pushed oil prices higher and led to a drop in gold prices. The WGC’s global head of central banks said central banks remained keen on gold and that the recent decline in prices had not changed their views. The WGC also said 93% of respondents reported already holding gold, up from 81% a year earlier. Among the reasons for holding gold, 90% of respondents said gold performs well during crises. Other key reasons cited included long-term value storage and portfolio diversification. Respondents from emerging markets and developing economies placed greater emphasis on gold as a hedge against geopolitical risk, with 85% citing that factor. As some central banks continued to shift their gold reserves, 9% of respondents said they increased domestic gold reserves over the past 12 months, up from 5% last year. Separately, 10% said they diversified the locations of their overseas gold reserves, up from 2% last year. Looking ahead, 7% of central banks said they planned to increase domestic storage over the next 12 months, and 9% said they planned to diversify overseas storage locations.