by Money Metals Exchange, Activist Post:
In the latest episode of Money Metals’ Midweek Memo, host Mike Maharrey explored two key financial topics: the surge in central bank gold purchases and the historical perspective of the Federal Reserve’s balance sheet activities, with a focus on inflation.
Central Bank Gold Purchases Surge
Maharrey discussed the most recent data released by the World Gold Council, which showed a significant increase in gold purchases by central banks. In July, global central banks added 37 tons of gold to their reserves—a staggering 206% increase from the previous month.
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This surge marks the highest level of gold buying since January 2024. Countries like Poland and Uzbekistan led the way, with Poland adding 14 tons, bringing its total to 392 tons. The National Bank of Poland aims to increase gold holdings to 20% of its reserves, currently at 15%.
Maharrey emphasized the underlying reason for this trend:
“The whole theme of central bank gold buying has been minimizing exposure to the dollar, diversifying reserves, and minimizing exposure to fiat currencies, particularly the dollar.”
Emerging markets and nations in Asia, Eastern Europe, and the Middle East continue to lead the charge in diversifying away from the U.S. dollar. Central banks have added a record amount of gold in the first half of 2024—the highest on record since the World Gold Council began tracking this data. This increase aligns with global concerns over fiat currency, particularly the U.S. dollar, as many nations seek to hedge against currency risks and U.S. monetary policy.
