Global De-Dollarization Is on The Way as World’s Central Banks Buy Gold at Fastest Pace in 55 Years
The comments below are an edited and abridged synopsis of an article by Arsenio Toledo
The world’s central banks are buying gold at the fastest pace since 1967, and metals expert Andy Schectman warned that people need to follow suit and buy precious metals to avoid the worst effects of global de-dollarization.
Data compiled by the World Gold Council (WGC) show that demand for gold is the highest in 55 years, with large portions of the recent buying spree being done by central banks keen to diversify away from the US dollar.
In December 2022, the WGC estimated that the world’s financial institutions bought 673 tonnes of gold. This follows nearly 400 tonnes of gold being purchased during the third quarter of 2022, the largest quarterly purchase since 2000.
Gold is currently trading at $1,928 per ounce. Spot gold hit $1,937 earlier this month, before cooling slightly.
Few are willing to bet that the trend toward central banks further diversifying their reserves with gold will change any time soon. Bernard Dahdah, a senior commodities analyst, noted that this trend “won’t change for a decade at least.”
Adrian Ash of Bullion Vault noted that the flight of the world’s central banks to gold “would suggest the geopolitical backdrop is one of mistrust, doubt and uncertainty.”
Ash noted that the US and its allies freezing Russia’s foreign currency reserves—worth around $300 billion—may have served as a warning for nations relying on the dollar and other foreign currencies of the need to diversify.
“When we see the central banks of the world buy more gold than at any time since 1967, and no one in this country has any clue that that’s happening, it’s frightening,” said Schectman.
“When we see the inventories of metal on the COMEX and the LME bled down to the lowest levels ever, and no one talks about what that really means, it’s frightening,” Schectman said. “What you are seeing is a massive de-dollarization using the misdirection of information and price to blindside the public.”