UBS, a global financial services company, has released a report predicting that central banks will amass $48 billion worth of gold in 2023.
The report cites several factors for this prediction, including persistent inflation, geopolitical concerns, and the weaponization of the US dollar.
Inflation has been a major concern for central banks around the world in recent years. The US inflation rate reached a 40-year high of 7.9% in January 2023, and inflation rates in other countries are also rising.
Gold is often seen as a hedge against inflation, and central banks may be buying gold as a way to protect their reserves from the effects of inflation.
Geopolitical concerns are also driving central banks to buy gold. The ongoing conflict in Ukraine has heightened geopolitical tensions, and there is a risk of further conflict in the future.
Gold is seen as a safe haven asset, and central banks may be buying gold as a way to protect their reserves from the risks of geopolitical instability.
The weaponization of the US dollar is another factor driving central banks to buy gold. The US government has used its control over the US dollar to impose sanctions on countries that it disagrees with.
This has led some countries to question the safety of holding US dollars, and they may be looking to diversify their reserves by buying gold.
The UBS report predicts that central banks will buy 700 metric tons of gold in 2023. This would be the highest level of annual demand for gold since 1950. The report also predicts that gold prices will reach $2,000 per ounce by the end of 2023.