What's Behind Central Banks' Gold Rush?

Central Banks globally have accumulated gold reserves this year at a pace not seen since 1967.

- RAJIV RANJAN SINGH

AURUM HAS become more attrac-tive in 2022, it seems. In 2022, central banks globally accumulated gold reserves at a pace last seen in 1967 when global finance followed diktats of Bretton Woods protocol and the U.S. dollar was backed by gold. Central banks bought a net 1,404 tonnes of gold in 1967. However, since 1971, when the U.S. abandoned the Bretton Woods Agreement, the gold buying spree by central banks diminished. For the first time since 1971 the world is witnessing the same spree as the net purchase of central banks across the globe amounted to 673 tonnes in the first nine months of 2022. It also lifted global official gold reserve to its highest level since November 1974 (36,782 tonnes).

Earlier, in 2021, central banks added 463 tonnes of gold to their global reserves, 82% higher than 2020. Total gold acquisition reached almost 400 tonnes in July-September quarter of 2022, 86% of central banks’ total annual gold buying of 2021.