Inflation and weaker USD are supporting central bank gold purchases. What’s more, USD weakness should continue to be a key support for investor demand, economists at ANZ Bank report.
Central banks are turning towards gold
“Rising uncertainty around monetary policies, inflation and increasing risk of equity market volatility should favour safe-haven gold demand. The US bond yield and prospects of a weaker USD further strengthen our conviction that the gold price will trade higher.”
“Central banks have increased gold purchases in recent months, offsetting some of the physical demand losses in Q2 2021. We see central bank gold purchases recovering to 520t this year.”
