Why central banks are rushing back to gold

Fifteen minutes after takeoff, the call came for Serbia’s central bank governor: millions of dollars’ worth of gold bars, destined for a high-security Belgrade vault, had been left on the runway of a Swiss airport.

- Richard Partington

Many central banks are repatriating stockpiles held overseas

In air freight - despite the extraordinary value of bullion - fresh flowers, food and other perishables still take priority. “We learned this the hard way,” Jorgovanka Tabaković told a conference late last year.

Serbia’s is among a growing number of central banks to hastily amass vast stockpiles of gold, upending decades of conventional economic logic and fuelling an increase in the gold price amid mounting geopolitical tensions. As Washington challenges the US Federal Reserve’s independence, sending jitters through financial markets, the price soared to a record $4,643 an ounce last week, and analysts have tipped it to break $5,000 this year.

As Donald Trump shatters the global rules-based order, official institutions (and private investors) are scrambling to buy gold: the share of the asset in central banks’ reserves has doubled in the past decade to more than a quarter, the highest level in almost 30 years.

Although this partly reflects the soaring bullion price, experts say central banks are also stuffing their vaults as an insurance policy in a volatile world. Many are also rushing to repatriate gold stockpiles held overseas, and slashing their exposure to the US dollar.