An unprecedented attack by central banks on the purchase and storage of gold

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{International: Euphrates News} Global central banks continue to carry out the largest historic attack on the purchase of gold. This has been going on since 2010. The most prominent reasons are the global financial crisis that erupted in 2008 and the geopolitical uncertainties sweeping the world, along with the desire to ease the dollar peg, according to follow-up experts.
Statistics show that about 34,000 tonnes of yellow metal is currently in the coffers of global central banks, or 17 percent of the total gold produced in history. At the current market price of an ounce, that "sleeper" wealth is worth $ 1.4 trillion, equivalent to Australian or Spanish output, for example.
After a 20-year sell-off, central banks have been buying heavily since 2010, with purchases in 2018 reaching almost half a century ago. Demand is steady and strong, according to market experts, but the question arises: Why is this demand for the yellow metal at a time when digital and virtual currencies topped their heads? In other words, how can one explain a classical behavior practiced by our forefathers since ancient times in parallel with the millennium generation, which only knows the digital world? What is the need for central banks to gold? Or to these huge amounts of it?
"At the end of the 20th century, the appetite of these banks was open to the sale of the ounces," says an expert in the field. In Belgium, the Netherlands, Argentina, Australia, Canada, Britain, Germany, Switzerland ... and even the International Monetary Fund sold March. This has contributed to the elimination (or liquefaction) of gold price fluctuations in that period, together with the entry of a strong new international currency, the Euro. Some countries have sold gold because their budget deficits have increased and they wanted to invest in assets that generate returns instead of the precious metal that does not generate any returns. " The gold was then glistening, prompting the writers of economists in that period to describe as «useless and useless», especially as it no longer enters the equation of monetary policies and currency coverage.
The situation continued until the financial crisis broke out. In the beginning, Western central banks stopped selling, and then buying started by the emerging countries, which have increased their presence strongly in international trade flows - led by China, which showed an appetite for demand and accumulation, and in the interest of the producing countries, of course.
The 2008 crisis also showed that liquidity was a high risk for all investors as well as for central banks. At that time, the global financial system was relatively free of free access to the dollar; gold turned into a safe haven.
Central banks in emerging countries are trying to diversify their reserves away from the "single dollar" to ease the link in the US currency "as much as possible", including geopolitical considerations, structural change in international trade and long-term outlook for the dollar.
Gold buyers have now expanded to include Turkey, Argentina, India, Indonesia, the Philippines and Thailand, whose central banks seek to diversify their reserves. In addition, China, which currently has about $ 79 billion in coffers, is buying up as a tool to increase confidence in the yuan.
But the most striking and prominent is in Russia. In 2018, Moscow bought 274 tons of gold, an unprecedented amount, and in parallel with Russia's liquidation of its US treasury bonds. With this additional accumulation, Russia is approaching stockpiles that the Soviet Union had before its collapse in 1990. If purchases continue until the end of the year, Russia will reach the level of France, which has the world's fourth-largest gold stockpile.
So Russia and China are now entering the club of countries with a thousand tons and more, along with the United States, which alone accounts for a quarter of the world's gold reserves, Germany, Italy, France and Switzerland. But the gold stocks in Russia and China remain below the dollar's inventory, unlike other countries in comparison






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