Over the past three years, the central banks of the emerging countries have increased 5 -time gold purchases. This is a data that goes beyond the cyclical fluctuations of the market and reports a change of strategic paradigm in global monetary reserve policies. This is a recent analysis of Goldman Sachs Researchwhich, supported by the data of the World Gold Council.
Overall, all over the world, they have purchased a total of 3,217 tons of gold From 2022 to 2024, with an increase of 2.5 times the 1,310 tons accumulated between 2019 and 2021. But what is hiding behind this real race for yellow metal? Because gold is returned to the center monetary strategies? And what economic and geopolitical implications should we expect?
Gold is confirmed as the good refuge par excellence
To understand this trend, it is necessary to start from a watershed event: the Russian invasion of Ukraine in 2022. The sanctions imposed by Western countries and, in particular, the freezing of about 300 billion dollars of foreign reserves of the Russian central bank, have awakened a profound awareness in emerging capital: the reserves in foreign currencies are not always sureespecially if detained in potentially hostile countries. Gold, as a physical asset not subject to foreign jurisdictions, has reaffirmed how bulwark of financial independence.
The recent waves of purchases, therefore, reflect precisely the will to protect themselves from Economic uncertainties and geopolitical risksincluding the sanctioning risk. In other words, as confirmed by the International Monetary Fund, gold is now considered a form of sovereign monetary insurance. It is the good refuge par excellence.
Because interest in gold grows
Gold, unlike dollars, euros or Treasury securities, it cannot be frozen From a foreign authority, it cannot be “printed” at will and does not depend on the solvency of an issuer.
To strengthen the strategic interpretation of the phenomenon there are also numbers on the gold reserves currently detained. The developed countries still hold a very high share of gold in their wallets: Italy, France and Germany exceed 70%, As well as the United States. These levels are the legacy of the “Gold Standard was”when the value of the coins was directly anchored to gold.
On the contrary, China and India – two of the main emerging economies – show a much more contained golden presence: 5% for China, 11% for India. The bulk of their reserves is still in foreign currency, mainly dollars. This imbalance has created a strong Incentive to re -able the reservesespecially in a context where trust in the American dollar is slowly eroding between some geopolitical actors.
Second Goldman Sachsthe long -term goal for many emerging central banks could be bring the gold share to 20% of the total reserves. And reaching this goal would require further purchases for hundreds, if not thousands, of golden tons in the coming years.
The effect on prices
This growing question of gold by central banks has had – and will continue to have – a direct impact on the price. In parallel to the institutional interest, also the private investments in investment funds listed on the stock exchange and gold related they grew up. But it is precisely the sovereign purchase, according to Goldman Sachs, that represents the main bullish engine of the gold price.
If the question of the central banks continues at similar rhythms, the institute provides that gold could arrive at 3,700 dollars ounce By the end of 2025. A level never seen in modern history, which would redefine the evaluation parameters of the good.
Is this the right time to invest in gold?
Investing on gold is not a risk without risk. Gold does not generate interests, it does not offer dividends and its value can be a lot volatile in the short term. But, with a long -term perspective and in a context of strong uncertainty, many central governors seem to consider it a necessary evil. Also because, in the case of new currency crises, international tensions or inflationary shocks, the precious metal retains a unique role: be one universally accepted value reserve and easily liquidable.
What we are observing is not only a market trend, but one transformation of monetary geopolitics. The central banks of the emerging countries are redefining the very concept of financial security, gradually moving the balance of the scale to gold. It is no longer just a raw material or a good refuge for nerve investors: it has become a tool of sovereignty and national resilience.
