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Central Banks Bullish on Gold. Will Investors Follow?

March 13, 2023

Watch Time 1:45 MIN

VanEck Gold Strategy Deputy Portfolio Manager, Ima Casanova, discusses gold purchases by central banks and how gold acts as a safe haven and portfolio diversifier, which should be attractive to investors, too. Find out more.

Could central banks be paving the way for gold investors?

Central banks purchased over 1,000 tons of gold in 2022. This is the second highest year of net gold purchases by central banks since 1950. And we do think investors could learn something from central banks.

The banks have been net buyers of gold for the past 13 years. So their commitment to gold is long term, they're not trying to “time the market”, they're buying and they continue to be net buyers over the past decade. And when surveyed and asked why they're holding gold and why they're accelerating their purchases of gold? The reasons are as a safe haven and as a portfolio diversifier.

So investors, more broadly, tend to look at gold as an asset of last resort but in fact we think it should be a core component and enjoy a permanent allocation in any portfolio. Investors can get exposure to gold via the metal itself, bullion, or through the gold equities.


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1MSCI AC World Index captures large and mid cap representation across developed and emerging markets countries. The index covers approximately 85% of the global investable equity opportunity set. 2Bloomberg Global Aggregate Bond Index is a flagship measure of global investment grade debt from a multitude local currency markets. This multi-currency benchmark includes treasury, government-related, corporate and securitized fixed-rate bonds from both developed and emerging markets issuers. 3Bloomberg Commodity Index is designed to be a highly liquid, diversified benchmark for commodities as an asset class. Bloomberg Commodity Index is composed of futures contracts on 20 physical commodities. 4ICE BofA 3 Month U.S. Treasury Index measures the performance of a single issue of outstanding treasury bill which matures closest to, but not beyond, three months from the rebalancing date. The issue is purchased at the beginning of the month and held for a full month; at the end of the month that issue is sold and rolled into a newly selected issue.

Gold investments are subject to the risks associated with concentrating its assets in the gold industry, which can be significantly affected by international economic, monetary and political developments. Investments in gold may decline in value due to developments specific to the gold industry. Foreign gold security investments involve risks related to adverse political and economic developments unique to a country or a region, currency fluctuations or controls, and the possibility of arbitrary action by foreign governments, or political, economic or social instability. Gold investments are subject to risks associated with investments in U.S. and non-U.S. issuers, commodities and commodity-linked derivatives, commodities and commodity-linked derivatives tax, gold-mining industry, derivatives, emerging market securities, foreign currency transactions, foreign securities, other investment companies, management, market, non-diversification, operational, regulatory, small- and medium-capitalization companies and subsidiary risks.

All investing is subject to risk, including the possible loss of the money you invest. As with any investment strategy, there is no guarantee that investment objectives will be met and investors may lose money. Diversification does not ensure a profit or protect against a loss in a declining market. Past performance is no guarantee of future results.

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