BMO: Central Banks and the Case for Gold

Gold demand sees momentum as central banks turn to long-term risk management

In a recent conversation with BTV’s Taylor Thoen, George Heppel, VP of Commodity Research at BMO, offered insight into why central banks are increasing their exposure to gold. According to Heppel, central banks operate with a very long-term and risk-averse investment mindset—qualities that align well with gold’s appeal as both a hedge against inflation and a safe-haven asset in times of geopolitical unrest.

The 2022 record-setting gold purchases by global central banks reflect a shift in sentiment toward assets that offer stability outside of traditional fiat currencies and volatile markets. Heppel notes that investor interest has also grown beyond central banks, as individuals and institutions look to gold to manage risks related to inflation, market volatility, and international tensions. With these macroeconomic forces in play, gold remains a key part of a diversified and resilient investment strategy.

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