economy
Gold is winning against the dollar as nations manage global strife. Deutsche Bank sees bullion prices surging
Gold's share of central bank reserves has tripled to 30% today, while exposure to the U.S. dollar has pulled back.
TL;DR
- Gold's share of central bank reserves has tripled to 30% from the 1990s.
- The U.S. dollar's share in foreign central bank reserves has decreased to 40% from over 60%.
- Central banks are increasing gold holdings as a hedge against geopolitical turmoil.
- About 80% of the rise in gold's share is due to price appreciation, but central bank purchases also contribute significantly.
- Emerging market central banks have been responsible for all gold purchases by central banks since the Global Financial Crisis.
- A potential future scenario suggests gold prices could reach $8,000 an ounce if emerging economies maintain a significant portion of their reserves in gold.