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Central banks have been big buyers of gold for over 10 years. Here is why they do it.

Central banks have been big buyers of gold for over 10 years. Here is why they do it.
Reuters



A number of central banks have loaded up on gold in the last year, according to data from World Gold Council.




Central banks own gold as part of their portfolios, which include foreign exchange reserves.




Gold hit record highs above $2,000 an ounce this month, before seeing its biggest daily drop in 7 years earlier this week.




UBS Asset Management's Max Castelli expects central banks to continue buying gold even once COVID-19 is over, given their long-term investment horizon.




"We expect this trend to continue – particularly if gold prices remain elevated once the current crisis is over," he said.




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Gold is one of the best performing asset classes in 2020. Its status as a safe-haven in times of economic crisis, together with its tendency to profit from a weaker US dollar, has driven investors into the market in droves.
In fact, investors, via exchange-traded funds, now own more gold than most central banks.
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