As for the reasons why central banks are scrambling to hold more gold, Gui Haoming, chief market expert of Shen Wanhongyuan Securities Research Institute, believes that with the development of the world economy, the status of the single dollar as the main currency of international reserves has been challenged. Many countries are pursuing the diversification of international foreign exchange reserves. Besides the US dollar, there are also many countries. Money becomes the object of reserve.
Liu Xiangdong, deputy researcher of the Economic Research Department of China International Economic Exchange Center, told the Securities Daily that gold plays an important role in the central banks reserve management. Short-term global economic weakness, geopolitical uncertainty and greater risk, gold and other precious metals become market hedge investments. Against the background of Global trade and capital imbalances, central banks have increased their gold reserves mainly to hedge against uncertain risks arising from dollar fluctuations and to guard against being kidnapped by unpredictable US monetary policies.
From this logic, gold has long-term investment value. Pan Xiangdong said that asset allocation needs diversification, which is conducive to risk diversification. Central banks tend to hold more gold when gold prices are low, which is conducive to optimizing asset allocation.
Source: Liable Editor of Securities Daily: Yang Qian_NF4425