September 2 Crypto News – Central Banks Pivot to Gold, Shattering Previous Reserve Records
September 2 Crypto News – In 2024, central banks around the world have significantly ramped up their gold reserves, signaling a major shift towards assets seen as stable stores of value. According to a September 2 report by the macroeconomics outlet, the Kobeissi Letter, global net gold purchases by central banks reached an unprecedented 483 tonnes in the first half of 2024, breaking previous records.
Gold Purchases Surpass Previous Records
The latest figure surpasses the previous record of 460 tonnes from the first half of 2023 by 5%. In the second quarter of 2024 alone, central banks acquired 183 tonnes of gold, marking a 6% increase year-over-year.
Major Buyers: Poland, India, and Turkey
Leading the charge in gold accumulation were the National Bank of Poland, the Reserve Bank of India, and the Central Bank of Turkey. Adam Glapinski, President of the National Bank of Poland, announced in late August that the bank plans to continue purchasing gold, with a goal for gold to comprise 20% of its reserves. Spencer Hakimian, founder of Tolou Capital Management, noted that nations like China, India, Russia, and Saudi Arabia have increasingly lost confidence in Western reserve assets, emphasizing that “Gold is the only neutral and non-volatile reserve asset.”
BRICS Nations and the Future of the Gold Market
Tech entrepreneur Kim Dotcom added to this sentiment in a September 1 post, highlighting that the anticipated launch of a gold-backed stablecoin by the BRICS nations (Brazil, Russia, India, China, South Africa, Iran, Egypt, Ethiopia, and the UAE) could further boost demand for gold and potentially destabilize the U.S. dollar. Dotcom predicted that once the BRICS gold-backed stablecoin is introduced, global trade in USD could see a sharp decline, with central banks moving away from the dollar, leading to major economic shifts by 2030.
Gold’s Performance Compared to Bitcoin
Meanwhile, “Global Markets Investor” observed that gold has had one of its strongest performances in history, with a 23% increase year-to-date, surpassing the S&P 500’s 18% gain. In comparison, Bitcoin (BTC) has appreciated by 37% in 2024, despite a 22% drop from its March all-time high. However, Peter Schiff, a gold advocate and crypto skeptic, pointed out that Bitcoin’s gains were mostly concentrated in the first two months of the year. Schiff also noted that despite the launch of spot Bitcoin exchange-traded funds (ETFs) in the United States, BTC has retraced much of its early gains.
Central Banks’ Caution Towards Bitcoin
On August 27, gold prices reached an all-time high of $2,525 per ounce, prompting Schiff to declare a shift in market momentum. Despite this, Bitcoin has still outperformed gold in 2024. However, central banks remain wary of the relatively new asset class that is Bitcoin.
As central banks continue to amass gold, the global financial landscape could be poised for significant changes, with traditional reserve assets like gold potentially gaining prominence over newer alternatives. Investors and policymakers alike will need to stay informed as these developments continue to evolve.
FAQ
Why are central banks increasing their gold reserves in 2024?
Central banks are increasing their gold reserves as a strategic move to secure their assets against global economic uncertainty and potential dollar instability. Gold is viewed as a safe-haven asset, offering stability and value preservation, especially in times of economic turbulence.
How much gold have central banks purchased in 2024?
In the first half of 2024, central banks globally purchased a record 483 tonnes of gold. This figure represents a 5% increase from the previous record of 460 tonnes set in the first half of 2023.
Which central banks were the largest buyers of gold in 2024?
The largest central bank buyers of gold in 2024 were the National Bank of Poland, the Reserve Bank of India, and the Central Bank of Turkey. These countries significantly increased their gold reserves during the first half of the year.
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