Finance

Central Banks Buying Gold Bullion

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Sometimes you can walk past a raging bull and not see it. Having many things on your mind can distract you and prevent or obscure your view. It is, however, impossible to miss a herd of raging bulls (no pun intended). If you do not see them, you will at least feel the ground shake when they pass you.

Some people did not notice that this year, central banks in the world bought 39% more gold bullion than the 5-year average. It may be because the central banks that bought the gold bullion are from Thailand, Hungary, and Brazil.

Now it should be in your face! You cannot miss it. Between September and October 2021, the Irish central bank bought two metric tonnes of gold bullion. Wait, is this not a Euro member country? Secondly, is Ireland not a Euro-member country? Lastly, is Ireland not an OECD member country?

You may say that this is all true, but why is it significant? Two tonnes of gold bullion are not that much. I must agree that it is not a large quantity of gold bullion. Let us put this in perspective. Before the purchase, Ireland only had 6 tonnes of gold bullion. Effectively the central bank of Ireland increased its holdings by a whopping 33%.

Is this a lone bull? No, certainly not. During the same time, Kazakhstan, India, and Russia also bought bullion. Kazakhstan bought 6 tonnes, India 3.8 tonnes, and Russia 3 tonnes. You will be surprised to know that these countries already hold significant quantities of gold bullion. Can you feel the ground shaking yet?

Why are the central banks aggressively increasing their gold portfolios? Throughout history, gold bullion was a safe hedge against inflation and hyperinflation. Central banks, institutional investors, and super funds are prone to buy gold when they perceive an increase in third-party.

The stock markets are unstable, and the sentiment has turned bearish after China’s property funds started to default in payment. The banking sector is also nervous about trillions in derivatives ticking like a time bomb.

In this uncertain market, you should protect yourself. Fortunately, you do not have to buy 400oz gold bars to invest in gold. Many gold bullion bars are for sale in small sizes and at a fraction of the costs of large bars.

If you are afraid it may be difficult to resell the gold bars when you need to resell, you may consider investing in gold coins. Well-known gold coins are the Perth Mint Kangaroo’s, the Krugerrand, the Canadian Maple Leaf, and the American Gold Eagle.

Both the gold bullion bars and the coins are easy to store. Some investors will store the gold at home in their safes. Other investors prefer to store them in safety deposit boxes. It does not matter where and how you store them. It is important to insure them to prevent total loss if something happens to your investment.

Conclusion.

Do not get caught in the stampede. Now is the best time to invest in gold bullion bars and gold coins. You can buy coins online from many dealerships to prepare for the tumultuous times ahead.   

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