Global volatility prompts banks' scramble for bullion

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

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 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.

Donald Trump's latest moves have sent jitters through global markets, from escalating his challenge to the US Federal Reserve's independence to his threat over the weekend to impose extra tariffs on eight European countries in his pursuit of Greenland. The latter move pushed gold to an all-time high of $4,689 an ounce yesterday, with silver prices also at a record, at $94.08 an ounce.

As 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.

Raphaël Gallardo, the chief economist at the asset manager Carmignac, said: "We have moved from Pax Americana to global discord, geopolitically.

"The dollar is losing the credibility as the nominal anchor of the global monetary system because the Fed is losing credibility, and US Congress is losing its credibility." Official reserves are a critical piece in the global monetary puzzle. Underpinning national currencies as a kind of safety fund, they are typically made up of currencies such as the dollar, euro, yen and pound, as well as gold, bonds and International Monetary.