Aren’t central banks selling their gold?

The difference between East and West

Another misconception surrounding gold investment is that because our central banks have sold all their gold, physical bullion is no longer relevant in today’s financial world.

Whilst Western central bankers often try to downplay gold and the price of gold, only the UK and Canada have actually sold much of their gold bars in the last few decades. The US still holds over 8,000 tonnes of physical gold bullion, whilst Germany holds close to 4,000 tonnes – both holdings being worth many billions of dollars when valued against the live gold price.

Outside of the Western world central banks have been buying gold bullion aggressively for a number of years now, and after the financial crisis of 2008 central banks worldwide became net buyers of gold again. Central bank vaults are far from empty and contain growing reserves of investment gold bars.

As global debt levels rise and the financial crisis continues, central banks appear set to keep buying gold, as the emerged nations of China and India prefer to hold tangible wealth over freshly printed dollars. Gold bullion is a strategic asset for central bankers, and individuals are now moving to follow suit and secure their wealth. These trends continue to drive the price of gold, especially in the physical gold investment market.

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