Central Banks Show ‘a Lot More Pessimism’ About US Dollar, Survey Shows

0 7

Central Banks Show Confidence in Gold, Less Optimistic About US Dollar: Survey

knife

The latest gold reserves survey by the World Gold Council shows that central banks are less optimistic about the future role of the U.S. dollar while their confidence in gold has risen. “There was basically a lot more pessimism about the U.S. dollar and a lot more optimism for gold,” said the council’s director of Central Banks and Public Policy.

Central Banks’ Confidence in US Dollar Drops

The World Gold Council (WGC) published the results of its 2023 Central Bank Gold Reserves Survey Tuesday.

“Following a historical high level of central bank gold buying, gold continues to be viewed favorably by central banks,” the gold industry body described, adding that 24% of central banks surveyed intend to increase their gold reserves holdings in the next 12 months. Last year, central banks bought a record 1,136 tons of gold. In contrast, the council noted:

Central banks’ views towards the future role of the U.S. dollar were more pessimistic than in previous surveys.

According to the survey findings, “46% of advanced economy respondents believe the U.S. dollar’s share of global reserves will fall” while 58% of respondents from emerging markets and developing economies (EMDE) expect it to do so, the council detailed.

Emerging-market central banks attributed their views to “shifts in global economic power” and gold being seen as a means of geopolitical diversification. On the other hand, developed economies cited environmental, social, and governance factors as the rationale behind their perspectives.

Central Banks’ Optimism in Gold Rises

The World Gold Council described that central banks’ “views towards gold’s future role grew more optimistic, with 62% saying that gold will have a greater share of total reserves compared to 46% last year.”

The WGC noted: “A majority of central banks expect a slight increase in the proportion of total reserves being denominated in gold over the next five years, with developing economies primarily driving this view.” The industry body added: “7 in 10 central banks surveyed believe that gold reserves will increase in the next 12 months. This is a 10-point increase from last year.”

Shaokai Fan, director for Central Banks and Public Policy at the World Gold Council, explained: “There’s been a major shift in how central banks perceive the dollar and the role of gold … Central banks move at a slow pace and last year’s events were a shock to everybody.” Noting that the optimism was not towards the Chinese yuan or the euro but toward gold, he stressed:

There was basically a lot more pessimism about the U.S. dollar and a lot more optimism for gold.

Central banks cited concerns over rising interest rates from key central banks like the Federal Reserve, geopolitical tensions from the Russia-Ukrainian war, and elevated inflation rates as the key drivers for their gold purchases last year. While the primary motivation for holding gold remained interest rate concerns this year, central banks are also worried about the stability of the U.S. banking sector, inflation, and possible future pandemics.

What do you think about central banks showing less confidence in the U.S. dollar? Let us know in the comments section below.

Leave A Reply

Your email address will not be published.

bitcoin
Bitcoin (BTC) $ 66,258.75
ethereum
Ethereum (ETH) $ 3,566.24
tether
Tether (USDT) $ 0.999623
bnb
BNB (BNB) $ 604.49
solana
Solana (SOL) $ 147.51
staked-ether
Lido Staked Ether (STETH) $ 3,563.96
usd-coin
USDC (USDC) $ 1.00
xrp
XRP (XRP) $ 0.489608
dogecoin
Dogecoin (DOGE) $ 0.134315
the-open-network
Toncoin (TON) $ 7.90
cardano
Cardano (ADA) $ 0.410435
shiba-inu
Shiba Inu (SHIB) $ 0.00002
avalanche-2
Avalanche (AVAX) $ 29.37
tron
TRON (TRX) $ 0.117101
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 66,361.78
polkadot
Polkadot (DOT) $ 6.28
chainlink
Chainlink (LINK) $ 14.74
bitcoin-cash
Bitcoin Cash (BCH) $ 420.91
uniswap
Uniswap (UNI) $ 10.96
near
NEAR Protocol (NEAR) $ 5.43
litecoin
Litecoin (LTC) $ 77.77
matic-network
Polygon (MATIC) $ 0.608215
leo-token
LEO Token (LEO) $ 5.90
wrapped-eeth
Wrapped eETH (WEETH) $ 3,720.53
dai
Dai (DAI) $ 0.999628
pepe
Pepe (PEPE) $ 0.000012
internet-computer
Internet Computer (ICP) $ 9.29
kaspa
Kaspa (KAS) $ 0.156733
ethereum-classic
Ethereum Classic (ETC) $ 24.80
renzo-restaked-eth
Renzo Restaked ETH (EZETH) $ 3,558.06
ethena-usde
Ethena USDe (USDE) $ 1.00
fetch-ai
Fetch.ai (FET) $ 1.40
aptos
Aptos (APT) $ 7.71
monero
Monero (XMR) $ 175.20
render-token
Render (RNDR) $ 8.00
hedera-hashgraph
Hedera (HBAR) $ 0.084315
filecoin
Filecoin (FIL) $ 5.16
mantle
Mantle (MNT) $ 0.87432
stellar
Stellar (XLM) $ 0.097399
cosmos
Cosmos Hub (ATOM) $ 7.10
okb
OKB (OKB) $ 45.77
blockstack
Stacks (STX) $ 1.85
arbitrum
Arbitrum (ARB) $ 0.898496
crypto-com-chain
Cronos (CRO) $ 0.096965
first-digital-usd
First Digital USD (FDUSD) $ 0.998598
dogwifcoin
dogwifhat (WIF) $ 2.48
immutable-x
Immutable (IMX) $ 1.63
injective-protocol
Injective (INJ) $ 24.17
sui
Sui (SUI) $ 0.929483
maker
Maker (MKR) $ 2,384.40
optimism
Optimism (OP) $ 2.03
the-graph
The Graph (GRT) $ 0.225022
vechain
VeChain (VET) $ 0.02874
bittensor
Bittensor (TAO) $ 299.57
rocket-pool-eth
Rocket Pool ETH (RETH) $ 3,961.37
lido-dao
Lido DAO (LDO) $ 2.14
floki
FLOKI (FLOKI) $ 0.000193
notcoin
Notcoin (NOT) $ 0.018202
arweave
Arweave (AR) $ 27.64
jasmycoin
JasmyCoin (JASMY) $ 0.037117
fantom
Fantom (FTM) $ 0.623877
mantle-staked-ether
Mantle Staked Ether (METH) $ 3,696.85
ondo-finance
Ondo (ONDO) $ 1.13
theta-token
Theta Network (THETA) $ 1.61
bonk
Bonk (BONK) $ 0.000024
bitget-token
Bitget Token (BGB) $ 1.14
based-brett
Brett (BRETT) $ 0.155989
thorchain
THORChain (RUNE) $ 4.57
celestia
Celestia (TIA) $ 7.88
coredaoorg
Core (CORE) $ 1.61
whitebit
WhiteBIT Coin (WBT) $ 9.61
eos
EOS (EOS) $ 0.64263
aave
Aave (AAVE) $ 86.15
pyth-network
Pyth Network (PYTH) $ 0.351997
algorand
Algorand (ALGO) $ 0.150504
jupiter-exchange-solana
Jupiter (JUP) $ 0.906014
sei-network
Sei (SEI) $ 0.392727
quant-network
Quant (QNT) $ 81.37
ethena
Ethena (ENA) $ 0.724731
starknet
Starknet (STRK) $ 0.891166
flare-networks
Flare (FLR) $ 0.026896
cheelee
Cheelee (CHEEL) $ 20.09
gala
GALA (GALA) $ 0.031582
gatechain-token
Gate (GT) $ 8.56
kelp-dao-restaked-eth
Kelp DAO Restaked ETH (RSETH) $ 3,603.39
flow
Flow (FLOW) $ 0.694204
kucoin-shares
KuCoin (KCS) $ 10.27
beam-2
Beam (BEAM) $ 0.019322
bitcoin-sv
Bitcoin SV (BSV) $ 48.29
axie-infinity
Axie Infinity (AXS) $ 6.50
tokenize-xchange
Tokenize Xchange (TKX) $ 11.72
zebec-protocol
Zebec Protocol (ZBC) $ 0.018332
bittorrent
BitTorrent (BTT) $ 0.00000095165498
ordinals
ORDI (ORDI) $ 43.53
dydx-chain
dYdX (DYDX) $ 1.49
elrond-erd-2
MultiversX (EGLD) $ 32.46
neo
NEO (NEO) $ 12.32
chiliz
Chiliz (CHZ) $ 0.096144
gnosis
Gnosis (GNO) $ 327.68
pendle
Pendle (PENDLE) $ 5.46