Central Banks Lead The Rush To Buy Gold

NEW DELHI: In the last few weeks prices of gold have inched closer to the peak of 2067.15 dollars per troy ounce recorded last August. The logic is easy to understand: The supply of yellow metal is limited, while you have lots of takers, including central banks. Last year central banks together purchased over 1,000 tonnes of gold. The national financial regulators are nervous as there seems to be no end to global uncertainty. They can’t be blamed. The covid-19 pandemic quickly morphed into a global economic crisis. The ongoing Russia-Ukraine only brought forward the geopolitical reset that was underway. Together, they have set inflation soaring. Traditionally, gold has always been the go-to hedge during times of uncertainty. Especially in the current circumstances, which are unprecedented. An interplay of three shocks—economic, energy and geopolitical—have roiled the world economy. With no end in sight to global uncertainty, gold prices are likely to remain elevated. For how long? Will retail consumers have to reconcile to costlier gold?
To answer all these questions and more we spoke to John Reade, Chief Market Strategist, World Gold Council.