In 2024, central banks worldwide are rapidly increasing their gold reserves, leading to unprecedented demand for this precious metal.
Central Banks and the Gold Market
Central banks purchased over 1,000 tons of gold in 2024, marking the third consecutive year that purchases surpass this level. This is a significant shift from previous decades when banks were net sellers. Additionally, during the first half of 2025, gold ETFs witnessed $38 billion in inflows, the largest surge in five years.
Geopolitical Risks and Investment Appeal
The increase in gold reserves is associated with growing concerns over economic instability and geopolitical tensions, particularly in light of Donald Trump's trade policies. Economist Peter Schiff pointed out that inflationary risks enhance the appeal of gold as Federal Reserve officials expect price increases.
The Future of Gold and Digital Assets
The Tether Gold token (XAUt), launched in January 2020, showcased a 40% rise over the past year, reflecting the movement of physical gold prices. Each token represents direct ownership of physical gold stored in secure vaults, making it attractive to investors seeking alternatives to traditional ETF structures.
Given the increasing purchases by central banks, rising demand from institutional investors, and digital innovations through tokens, gold maintains its appeal as a safe haven asset amid economic uncertainty.
