Central banks expect further Gold purchases in the next 12 months – Commerzbank

"This week, the World Gold Council published its annual survey among central banks on their assessment of Gold reserves and future Gold purchases, Commerzbank's commodity analyst Carsten Fritsch notes.

Considerable Gold purchases by central banks can also be expected

"A total of 73 central banks took part in the survey, the highest number since the survey began eight years ago. The results can be summarised simply. Gold reserves are likely to increase further over the next 12 months. This is the expectation of 95% of the central banks surveyed. More than 40% of the central banks stated that they themselves intend to buy Gold in the coming 12 months. A year ago, the respective shares were 81% and 29%."

"It is therefore not surprising that 72% of central banks expect the proportion of Gold in total currency reserves to increase slightly over the next five years, while 4% even expect a significant increase. The most frequently cited reasons for holding Gold reserves are the performance of Gold in times of crisis, portfolio diversification, Gold as a store of value and hedge against inflation as well as the historical position of Gold."

"The aforementioned motives were consistently more common among central banks from emerging economies than among central banks from developed countries. The exception was the historical position of Gold, which was mentioned more frequently by central banks from developed countries. The survey thus confirmed that Gold is playing an increasingly important role for central banks and that considerable Gold purchases by central banks can also be expected in the coming months."