{"id":42662,"date":"2024-02-22T04:18:38","date_gmt":"2024-02-22T12:18:38","guid":{"rendered":"https:\/\/goldco.com\/?p=42662"},"modified":"2025-01-13T14:20:51","modified_gmt":"2025-01-13T22:20:51","slug":"governments-around-the-world-continue-to-go-for-gold","status":"publish","type":"post","link":"https:\/\/goldco.com\/governments-around-the-world-continue-to-go-for-gold\/","title":{"rendered":"Governments Around the World Continue to Go For Gold"},"content":{"rendered":"

One of the peculiarities of the gold market is that it seems that gold demand rises as the price gets higher, and falls when the price gets lower. No one seems to want to buy gold when it\u2019s \u201con sale,\u201d but everyone wants to jump on the bandwagon when gold soars.<\/p>\n

Since 2020 gold has stayed at relatively high prices, hitting an all-time high price late last year, and it remains over $2,000 an ounce. Part of the reason for that is continued safe haven buying from individuals around the world, while another part of it is continued interest from central banks and governments.<\/p>\n

Just like individuals, governments and central banks want the sense of stability and security that gold can give. And the popularity of gold with governments and central banks shows no signs of wavering.<\/p>\n

Arizona Jumps on the Gold Train<\/h2>\n

A committee in the Arizona state legislature recently moved legislation<\/a> that would establish a state gold depository and pave the way for a gold- and silver-backed currency. The idea of a state bullion depository isn\u2019t a new one, with Texas having already paved the way in recent years.<\/p>\n

But the fact that this idea is gaining traction, and the fact that the idea of specie-backed currency is gaining renewed attention, is another sign that gold isn\u2019t having any problems retaining its popularity today.<\/p>\n

As more and more states warm to the idea of starting gold depositories or incentivizing the use of gold- and silver-backed currencies, it could bring renewed attention to the benefits of gold ownership and the use of sound money.<\/p>\n

Zimbabwe Pushing Gold-Backed Currency<\/h2>\n

It isn\u2019t just US states thinking about gold-backed currency. Zimbabwe is thinking about introducing a gold-backed currency<\/a> too.<\/p>\n

Yes, that Zimbabwe, the one whose legendary hyperinflation about 15 years ago made it and its currency the butt of millions (or quadrillions) of jokes. Having failed in the interim to achieve monetary stability, the Zimbabwean government is now discussing the idea of introducing a gold-backed currency.<\/p>\n

The devil, of course, is in the details. Since the country\u2019s notorious hyperinflationary episode, Zimbabwe has gone through a number of different currency crises.<\/p>\n

At one point foreign currencies such as the US dollar and South African rand were the dominant currencies in use. Zimbabwe eventually reintroduced its own currency a decade ago, but the same problems that beset the old currency plagued the new one, with overprinting and declining public trust eroding the currency\u2019s value.<\/p>\n

Since then the Zimbabwean government has started limited production of gold coins<\/a>, a welcome start towards sound money. But whatever gold-backed currency scheme it intends to start will have to overcome issues of trust.<\/p>\n

If Zimbabweans can trust that the government actually backs its currency with gold, and that the currency can be exchanged for gold at the nominal exchange rate, then the scheme could be successful. But if the government tries to print more money than it has gold backing, and if it limits conversion of currency into gold, the whole idea could go down in flames.<\/p>\n

China Continues to Accumulate Gold<\/h2>\n

China has purchased gold for the 15th consecutive month<\/a>, bringing its total gold holdings to over 2,200 tonnes. That places it solidly in 6th place behind Russia on the list of the world\u2019s largest gold holders, and only a couple hundred tonnes behind third-place Italy.<\/p>\n

There have been rumors for years that China\u2019s gold accumulation is part of a plan to introduce a gold-backed currency to replace the dollar. Whether that\u2019s feasible or not is debatable, but there\u2019s probably a reason China continues to add to its gold reserves.<\/p>\n

It\u2019s not alone in doing that, however, as central banks around the world continue to add gold to their official gold reserves. In 2023, central banks added 1,037 tonnes of gold<\/a> to their coffers, the second highest level on record and only 45 tonnes less than the record set in 2022.<\/p>\n

Gold demand in 2023 was driven in large part by economic uncertainty and fear of war, neither of which look to abate in 2024. So this year could once again be a year of strong gold demand.<\/p>\n

Are You Protecting Yourself With Gold?<\/h2>\n

Central banks and governments aren\u2019t doing anything unusual by building up their gold reserves. They\u2019re merely doing the same things that many people around the world have been doing for years.<\/p>\n

Gold\u2019s ability to act as a safe haven, as a store of value, and a hedge against inflation make it a popular asset to hold, particularly during times of economic uncertainty and financial turmoil. With fear of recession in the US growing, and with countries like Germany and Japan already in recession, safe haven demand for gold could continue to grow this year.<\/p>\n

Between rising demand from individuals on the one hand and growing demand from central banks on the other, that rising demand could continue to put upward pressure on the gold price, which at over $2,000 an ounce remains just shy of last year\u2019s all-time highs.<\/p>\n

Many analysts are predicting gold to continue to rise this year, and if a particularly severe recession hits the US, and gold demand increases even more than forecast, even those price forecasts could end up looking conservative in hindsight.<\/p>\n

If you\u2019re looking to protect your financial well-being, now is the time to start doing so. And if gold is on your list of potential options, now is the time to start thinking about how you want to start protecting yourself with gold.<\/p>\n

Whether you plan to protect your tax-advantaged retirement savings with a gold IRA or just want to make a direct cash purchase of gold coins<\/a> or gold bars to store at home, Goldco has options available for you.<\/p>\n

Goldco has worked hard to become one of the best and most trusted gold IRA companies in the industry. With over $2 billion in precious metals placements and over 5,000 5-star reviews, we go the extra mile to bring our customers quality gold products and stellar customer service.<\/p>\n

Don\u2019t let your hard-earned wealth fall victim to inflation or recession. Call Goldco today<\/a> to learn more about how you can help safeguard your savings with gold.<\/p>\n","protected":false},"excerpt":{"rendered":"

One of the peculiarities of the gold market is that it seems that gold demand rises as the price gets higher, and falls when the price gets lower. No one seems to want to buy gold when it\u2019s \u201con sale,\u201d but everyone wants to jump on the bandwagon when gold soars. Since 2020 gold has […]<\/p>\n","protected":false},"author":3,"featured_media":42663,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[212,207],"tags":[1185,1258,531],"class_list":["post-42662","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-central-banks","category-economy","tag-central-bank-gold-purchases","tag-gold-depository","tag-gold-reserves"],"acf":[],"yoast_head":"\nGovernments Around the World Continue to Go For Gold – Goldco<\/title>\n<meta name=\"description\" content=\"Gold isn't just popular for private individuals. 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