With escalating geopolitical tensions, increased sanctions, and discussions around de-dollarisation, interest in gold is rising.
Central banks, particularly those of Russia and China, have bought gold at the fastest pace as countries seek to diversify their reserves away from the dollar. Both Moscow and Beijing have doubled their purchases in the past year.
Central banks often hold gold reserves for their safety as a stable asset during financial crises, liquidity, and return characteristics.
Demand for the precious metal continues to surge, pushing its prices to record highs in recent months. A year ago, the spot price was around at $2,000 per ounce. It is now more than $2,500 per ounce, a rise of 25%.
This unprecedented surge indicates global uncertainty, driven by trade tensions, record-high interest rates in advanced economies, and conflict in the Middle East and Ukraine. Gold purchases by central banks is currently propelling its price.
The United States still has the highest overall gold reserves, holding 8,133 tonnes. Half are stored at the US Bullion Depository, known as Fort Knox, a US Army base in Kentucky.
Germany ranks second with 3,351 tonnes, followed by Italy with 2,452 tonnes.
