Gold replaces US Treasuries as top reserve asset, ECB says

https://www.ft.com/content/87ef8f25-eb81-4eed-919c-fe5b49a1ac2c

by petethomas • 2 months ago

44 11 2 months ago

andsoitis2• 2 months ago

Dual reason: partly accumulation, partly mark-to-market.

Central banks have been buying gold aggressively since 2022 as a response to USD reserve weaponization, and gold has rallied 70% in that window.

The headline can be erroneously interpreted as de-dollarisarion.

FloorEgg2• 2 months ago

Central banks have been buying gold aggressively since 2022 as a response to USD reserve weaponization
The headline can be erroneously interpreted as de-dollarisarion.

These statements appear somewhat contradictory. If reserves are buying gold instead of dollars and the effect is that the value of gold is increasing, wouldn't the underlying reason still be de-dollarisation?

andsoitis2• 2 months ago

Agree, the nuance is that it’s a sign of de-dollarisation intent and direction, not de-dollarisation achieved. The dollar is still ~58% of global reserves. It would take decades.

TacticalCoder• 2 months ago

If reserves are buying gold instead of dollars and the effect is that the value of gold is increasing

Central banks and the IMF only own less than 20% of all the gold ever mined: it's probably not the one or two additional percent they bought that made the prices skyrocket by 70%.

For example used supercars and hypercars' values have gone through the roof too: and that's for sure not because central banks are stockpiling those.

Causation / correlation and all that.

westurner• 2 months ago

wouldn't the underlying reason still be de-dollarisation?

What are the causes of dedollarization? What does de-dollarization indicate?

Dedollarisation > Causes: https://en.wikipedia.org/wiki/Dedollarisation#Causes

Gold as an investment: https://en.wikipedia.org/wiki/Gold_as_an_investment

Gold has intrinsic value at cost in printed circuit boards, medical equipment, medical devices, space shielding.

Does investing in gold cause growth?

zrn900• 2 months ago

USD reserve weaponization

The dumbest thing the US has ever done. It's like a tech company intentionally sabotaging its own customer ecosystem...

burnt-resistor• 2 months ago

Unpaywalled: https://archive.is/YvcCI

Also, it'd be interesting to know how many and how much $ is going into currency swap lines to avoid bond dumps and keep yields under control.

karp773• 2 months ago

Gold is back in vogue. Look at the White House, for example. All gold and glitter. Of course, others are trying to immitate the style, hence the demand for gold.

hnburnsy• 2 months ago

The move was driven by valuation effects - gold purchases actually slowed down last year, but prices (GC00) surged. Using 2023 prices, Treasurys would still be the top holding, at 26% vs. 16% for gold, the ECB said

Gold replaces US Treasuries as top reserve asset, ECB says

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