Gold as a Safe Haven in Times of Uncertainty

The Roscongress Foundation has prepared an analytical report ‘Gold VS Treasuries: Why Central Banks Buy Precious Metal’. Regulators of various countries, mainly developing countries, have been increasing their purchases of gold in recent years, increasing its share in their reserves. In 2022, they bought a record amount of gold, and in 2023, demand was almost as strong. Despite such strong demand, gold prices reached record highs this year, exceeding USD 2,400 per ounce. The rally was fuelled, among other things, by unrelenting demand from China amid geopolitical tensions. At the same time, global central banks are buying less US debt securities or even withdrawing from them. More and more regulators are considering gold as an alternative to US Treasury obligations because of inflation, geopolitical risks and the desire to reduce dependence on the dollar.

The imposition of sanctions on Russia by the European Union and the United States has also forced regulators in many countries to rethink their approach to reserve assets. According to an Invesco survey of central banks and sovereign wealth funds, a ‘significant proportion’ of central banks are concerned about the precedent set by the freezing of Russian assets in the West. However, most respondents (58%) said it had made gold a more attractive asset.

The full text of the analytical report is available on the website of the Roscongress Foundation and in its Zen channel.