Recently, DataTrek shared an analysis from the New York Federal Reserve about the market share of the US dollar held by central banks between 2015 and 2021.
On one hand, this market share has never been lower, and on the other, it has dropped by 7 percentage points during this period.
This decrease mainly comes from China, India, Switzerland, and Russia.
In a context where central banks are looking to diversify their assets, gold seems like an interesting option as it cannot be confiscated or subjected to sanctions.
While the yellow metal still represents a small portion of the reserves of central banks in developed and emerging economies, the chart clearly shows that this ratio is on the rise.
Given the growing geopolitical tensions, the scale of the US deficit, a potential lower interest rate environment, and the upcoming US presidential election, the return prospects still seem promising.
Did you know that during Trump's presidency, the price of gold increased by 50% between 2017 and 2021?
Today’s article on air quality in China serving as a proxy for economic activity was useful and timely. There are conflicting anecdotal reports hitting the news each day, some by Beijing spokespeople on Bloomberg. The air quality data is hard to argue with.
I also thought the graphics on gold acquisition by certain crnteal banks was very useful!