Central banks are consuming a fifth of the global supply of gold as a part of the de-dollarisation strategy, according to Goldman Sachs Group Inc.
Demand from central banks for gold is biggest since the Nixon era, eating up 20% of global supply,” Jeff Currie, the head of global commodities research at Goldman, said in a Bloomberg Television interview Monday.
Key quote
We like gold better than bonds because the bonds won’t reflect that de-dollarization.”
Gold cannot fully replace government bonds in a portfolio, but the case to reallocate a portion of normal bond exposure to gold is as strong as ever.
We still see upside in gold as late-cycle concerns and heightened political uncertainty will likely support investment demand” for bullion as a defensive asset.
Gold is currently trading at $1,461 per Oz, representing a 6.16% drop from the six-year high of $1,557 registered on Sept. 4.
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