Home History Information Secretariat Contact

Reasons Why Central Banks Buy Gold

When it comes to making investments we all know that gold is the best choice that we have at this moment. Not only are private investors interested in buying 1kg gold bars, gold bullion coins, gold mining shares or gold ETFs but also Central Banks have started to invest heavily in this precious metal. Countries should as Venezuela, Bangladesh, China, Taiwan and Brazil have begun diversifying their national reserves with this glittering metal.

The reason behind this sudden shift of focus from paper currencies to gold is the economic crisis that seems to have taken over the entire world. All countries, especially those in Europe, have been heavily hit by the crisis and so have the United States. The debts that keep pilling and the fact that the governments are not taking any real actions against these issues has determined more and more people to invest in gold, whether we are speaking about 1kg gold bars, gold bullion coins, gold mining shares or gold ETFs and so on.

The European debt crisis that appeared in Greece and has since extended in many parts of the continent, and has lead to a quick succession of bankruptcies and failures in the banking institutions. This is why many Central Banks have decided to increase their gold reserves in order to have more power in case something goes terribly wrong.

The high inflation rates have transformed the national and international paper currencies into currencies that have lost almost half of their value. In order to keep up with the demands and the increasing debt, governments have started to print more and more money triggering a huge inflation rate. Therefore, you will be able to buy fewer goods with the same amount of money than you could a while back. However, with one gram of gold you are able to purchase the same amount of goods that you could a 100 years ago. It is easy to notice the fact that gold will retain its value even during periods of hard recession and financial instability.

Investing in gold is a good strategy that one should adopt whether we are speaking about 1kg gold bars, gold bullion coins, gold mining shares or gold ETFs. The example of the Central Banks should clearly be followed as the glittering metal can only bring us advantages. So make sure that you start researching this precious metal and see whether you are tempted to invest in it or not.

By: JacquelineBrewster