Gold outperforms the euro as a global reserve asset, says the European Central Bank

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Gold has exceeded the euro as the second most important reserve asset in the world for central banks, driven by standard purchases and high prices, according to the European Central Bank.

The alloys represent 20 percent of the international official reserves last year, as it exceeded 16 percent of the euro and the second to the US dollar by 46 percent, data from the European Central Bank report showed on Wednesday.

The European Central Bank wrote: “Central banks continued to collect gold at a record pace,” adding that the central banks for the third year in a row obtained more than 1,000 tons of gold in 2024, which is light of the total annual annual production and the annual amount in the contract from 2010.

stock gold Central banks are close to the world from the highest historical levels of the Bretton Woods after the war. Until 1971, global exchange rates were repaired in US dollars, which in turn can be converted into gold at a fixed exchange rate.

The reserves of the Golden Central Bank, which peak at 38,000 tons, increased in the mid -sixties, again to reach 36,000 tons in 2024, according to the latest European Central Bank figures. “Central banks worldwide are now carrying nearly gold as they did in 1965,” said the European Central Bank report.

Among the major buyers last year are India, China, Turkey and Poland, according to the World Gold Council.

An increase of 30 percent in the price of gold last year was one of the factors behind the increase in the gold share of global foreign reserves. Since the beginning of the year, the price of gold has increased by 27 percent, and a The highest historical level of $ 3500 For every ounce you tell.

The European Central Bank said: “This stock, in addition to the high prices, made gold the second largest global backup assets in market prices in 2024-after the US dollar,” said the European Central Bank.

Although gold does not have an interest and cost of storage, it is seen by investors worldwide as the final safe origin that is very liquid, and is not exposed to the risks of the opposite party or the penalties.

In recent years, central banks are also trying to diversify away from the US dollar amid concerns about geopolitical instability and American debt levels. The trend of getting rid of fading, especially among developing countries, accelerated after the Russian invasion of Ukraine, when the United States targeted Russia’s arrival in the financial markets.

The European Central Bank report said: “The demand for gold on cash reserves increased sharply in the wake of the full conquest of Russia for Ukraine in 2022 and remained high,” adding that the gold purchases seemed to hedge against sanctions such as freezing financial assets.

“In five of the 10 largest annual increases in the gold share in foreign reserves since 1999, the countries concerned have faced sanctions in the same year or the previous year,” the central bank analysis showed, adding that “countries near China and Russia” on gold more than others over the past three years.

A survey between 57 central banks that maintained gold last year also revealed that concerns about sanctions and expected changes in the global monetary system and the desire to become less dependent on the US dollar were drivers in emerging markets and developing countries.

Moreover, while gold has become historically cheaper when the real revenues of other assets increased, this long -term relationship has collapsed since early 2022, when investors were attracted to gold as a hedge against political risks more than hedging against inflation.

The European Central Bank indicated that gold supplies in recent decades have increased during the times of high prices: “If history is any evidence, it may support the increase in the official demand for gold reserves also more growth in global gold supplies.”