Central banks set a new record of gold purchases in 2022 according to the World Gold Council. They bought about 400 metric tons of gold in the third quarter last year. Purchases of gold have reached a level not seen since 1967.
According to Daniel Lacalle, a Spanish economist, the central banks are adding gold to their reserves because they need to prop up their balance sheet to improve their reserve base but also because the threat of a digital currency means that a lot of investment banks that used to treasure US dollars or Euros are scared. If central banks start issuing digital currencies, the level of purchasing power destruction of currencies seen in the past fifty years will be exceedingly small compared with what can occur with unbridled central bank control.
Gold is proving to be the stability factor that many central banks require.
Original source: Daniel Lacalle
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