Investment guide: Potential top gold stocks for your vault, boasting potential gains of up to 500%
In the world of finance, central banks are making significant moves in the gold market. The strong investment banking business could more than compensate for the weakness of other divisions in the third quarter, as reported on S.30.
The Bank for International Settlements suggests that the optimal gold share for central banks is ten percent. However, current central bank gold accumulation shows an increase, with over 1,000 metric tons being purchased annually since 2021. This is a significant jump from the 400-500 tons annually over the previous decade.
Emerging market central banks, such as China, India, Turkey, Poland, and Kazakhstan, have been large buyers and continue to expand their gold reserves. This trend is expected to continue, with emerging markets' central banks forecast to purchase approximately 1,500 tonnes of gold annually by 2030.
The ongoing gold rally was triggered by the decision to freeze Russian gold reserves in February 2022. Gold prices have increased by 772% compared to the Euro since the introduction of the Euro in 1999, underscoring the appeal of gold as a key reserve asset.
Despite the increase in gold purchases, many central banks have yet to reach the optimal benchmark of around 10% of reserves, suggesting continued upside in gold buying. The software provider mentioned in S.26 has reached the permissible maximum weight in the DAX but has not yet exhausted its price potential.
Sources:
[1] "Central banks boost gold purchases to record levels." (Reuters, 2022) [2] "Gold demand from central banks soars to record levels." (World Gold Council, 2022) [3] "Central bank gold purchases hit 12-year high." (Kitco News, 2022) [4] "Central banks and gold: A relationship reborn." (Frankfurt Gold Exchange, 2021)
Central banks are substantially increasing their gold purchases, with more than 1,000 metric tons being purchased annually since 2021, potentially signifying a significant expansion in investing in gold. While many central banks have already accumulated a substantial amount of gold, there's a possibility that they will continue to invest in gold to reach the suggested optimal benchmark of around 10% of reserves, as indicated by the Bank for International Settlements.
