Edward Conard

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  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
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Upside of Inequality Oxford Unintended Consequences

AI Summary. Gold accounts for about 10% of aggregate official foreign exchange reserves, roughly its level in the early 2000s. International Monetary Fund country data indicate most added official gold holdings came from a few central banks, with over half of reported accumulation from China and Russia and about a quarter from several emerging markets.

Patrick Douglass, Linda Goldberg, and Oliver Hannaoui Federal Reserve Bank of New York
Date Posted:

Research from @NewYorkFed finds the rise in Central Bank gold holdings since 2009 was driven by a few countries, with China and Russia accounting for over half of reported gold accumulation, not a widespread effort to diversify away from dollars.

Are central banks broadly shifting reserves into gold?

Core argument: Gold accounts for about 10% of aggregate official foreign exchange reserves, roughly the same share as in the early 2000s.

Gold’s share of aggregate reserves remains modest at about 10%, roughly its level in the early 2000s. IMF country-level data suggest that most of the increase in official gold holdings has come from just a few central banks. More than half of reported gold accumulation since 2009 was from China and Russia, with another quarter coming from a handful of emerging market central banks (Turkey, India, Kazakhstan, Uzbekistan, and Thailand).

Takeaways by Macro Roundup® AI

  1. Gold accounts for about 10% of aggregate official foreign exchange reserves, roughly the same share as in the early 2000s.
  2. China and Russia together account for more than half of reported official gold accumulation since 2009, according to IMF country-level data.
  3. Turkey, India, Kazakhstan, Uzbekistan, and Thailand account for another quarter of reported official gold accumulation since 2009.

Related Articles:

  • Gold Rising — China appears to be shifting its reserve diversification toward gold, but its gold allocation remains well below that of other countries at odds with the United States, such as Russia and Turkey, which raised their gold holdings substantially. Gold held in domestic custody sits outside U.S. influence.
  • China Leads Record Central Bank Gold Buying in First Nine Months of Year — China has led record global central bank purchases of gold, as countries seek to hedge against inflation and reduce reliance on the dollar. The buying has helped bullion prices trade just under $2,000 a troy ounce despite rising bond yields and a strong dollar, even as gold demand excluding bilateral over-the-counter flows was 6% lower year-on-year at 1,147 tonnes.
  • The New Gold Boom: How Long Can It Last? — Central banks bought 1,079 tonnes of gold bullion in a year, the most since records began in 1950, with prices hovering near the nominal all-time high of $2,072 per troy ounce. Developing countries wary of the US dollar have been diversifying reserves after the West froze $300bn of Russian foreign exchange holdings.
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