Do you know why central banks around the world trust gold?

        Gold is the most asset held by central banks around the world. Central banks have huge reserves of gold. Also, they are always interested in increasing the stock of gold. Central banks usually invest their significant share in gold. No matter the central bank of the world, they prefer gold first against US dollar or Japanese yen. Banks believe that by investing in gold our assets will be protected.

What is the reason for this desire?

         Generally, central banks do not have to build any personal property, so that they invest everywhere. In order to keep the country financially secure, central banks give first preference to gold. Nevertheless, central banks invest many places in their portfolios. They feel financially secure by investing in gold. Any deposit of the world currency has its fluctuation and low profits, while investing in gold makes a permanent asset.

         Therefore, in the country where the recession is heard, the central banks of that country start increasing the gold reserves. Gold acts like a ram arrow to help any country cope with the recession. Gold is considered to be the most liquid. Also it is given the status of most value. In times of trouble, gold can be pledged or sold. This can also increase liquidity (foreign exchange reserves) in foreign currency.

          The reality is that the world's large central banks keep their gold in various international locations (eg London), where gold can be traded easily without any transport. There is no credit risk in gold. Apart from this, the biggest thing is that central banks need gold to keep their balance seat stable.

          The move of gold and currency is opposite from each other, so the stability of the country with which both live is more. In the current economy of the world, central banks are keeping a part of their reserves in the form of gold. So that they can protect themselves financially.
These are some of the reasons why central banks around the world are fiercely buying gold.

How much gold has been purchased so far ?

          According to the news reports in the media report, according to the Gold Council, the central banks of the entire world have purchased 374.1 tonnes of gold by the first half of 2019. Of this, 224.4 tonnes of gold have been purchased in the second quarter of the year. China's Central Bank People of China has purchased about 85 tonnes of gold in the first 7 months of 2019.

China increases gold reserves on trade war

         To deal with the ongoing trade war between the US and China, China is secretly increasing its gold reserves to fix its economy. In order to reduce its dependence on the US dollar, the Central Bank of China, People's Bank of China, has been buying gold at a slow pace for a long time. Whenever China devalues ​​its currency, it saves its currency through gold.