| 08 May 2024 17:36 | | COMEX Gold wavers around $2320 per ounce | | | COMEX Gold futures are witnessing very tight movement amid slight upmove in the US dollar index and firm risk appetite in European equities. The counter currently trades at $2321 per ounce, almost unchanged on the day. Meanwhile, according to Geeta Gopinathan, first Deputy Managing Director of International Monetary Fund (IMF), looking at global FX reserves, the most notable development during 2022-23 has been an increase of gold purchases by central banks. Gold is generally viewed as politically neutral safe asset, which can be stored at home and be insulated from sanctions or seizure. It can also be an inflation hedge but cannot be easily used in transactions. She noted that the share of gold in the FX reserves of the China bloc has been rising since 2015—a trend not exclusively driven by China and Russia. Importantly, during the same period, the share of gold in FX reserves of countries in the U.S. bloc has been broadly stable. This suggests that gold purchases by some central banks may have been driven by concerns about sanctions risk. This is consistent with a recent IMF study confirming that FX reserve managers tend to increase gold holdings to hedge against economic uncertainty and geopolitical including sanctions risk. | | Powered by Capital Market - Live News |
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