‘The dollar is losing credibility’: why central banks are scrambling for gold

So, the phone rang a quarter of an hour after the plane left Switzerland.So, imagine a whole bunch of gold bars, worth millions, just sitting out on the runway. These weren't just any gold bars; they were supposed to be locked up in a really secure vault in Belgrade.So, what I found out is that in air freight, things like fresh flowers and food, since they can go bad, actually get priority over really valuable stuff like gold."We learned this the hard way," Jorgovanka Tabaković, who runs Serbia's central bank, said at a conference late last year.Serbia has company.More and more, central banks are really stocking up on gold, which is a big change from how things have been done for a long time.All this craziness, thanks to a shaky global political scene, is really pushing gold prices up high.Knowing what Washington is like these days, it's no surprise that financial markets are a bit jumpy.

The price just hit a new high, $4,643 an ounce, and there are even some experts who think it could go over $5,000 before the year ends.With the world seeing less of America's old leadership, folks from governments to private investors are all looking at gold.So, in the last ten years, central banks have really stacked up on gold. They've gone from holding a little to holding a lot—it's actually doubled.

Now, more than a quarter of everything they have is gold, which is more than they've had in almost 30 years.Sure, gold's gotten pricier, but folks in the know are saying there's more to it; it's a deliberate strategy.Banks are really filling up their vaults, almost like they're buying insurance for a world that feels a bit unpredictable right now. They're quickly bringing all their stored gold back from overseas and trying to rely less on the US dollar.Things have shifted quite a bit, haven't they? It feels like we've gone from a time of American peace to a period where everyone's pretty much at odds, especially when you look at global politics.When we look at what the US is up to, it's really the law of the jungle, says Raphaël Gallardo, who is the chief economist over at Carmignac, an asset manager.He said that private and state investors are getting worried about their money, feeling like their dollar reserves aren't safe anymore because they could be taken at any time.The dollar's losing its standing as the world's main money reference.

That's because people are starting to doubt the Fed, and even the US Congress.I've been thinking a lot about our approach, and I think we can really expand what we're doing. Let's make sure we find all the new opportunities out there. I'm excited to see where we can take this.

Things are always changing, so staying on top of the next big thing will be key. Looking ahead, I hope we can create something truly special.

Our existing strategy has served us well, but there's always room to grow. It’s a chance to put our best foot forward and show everyone what we're capable of. I really believe in our team, and I’m ready for us to move forward.Official reserves are really important for the global financial world; they support national currencies and act like a safety net when things get rocky.We're talking about money that countries keep as backup, usually big world currencies such as the dollar, euro, and yen.

They also hold gold and other stuff that counts as assets.For a long time, like pretty much all of the last hundred years, the dollar was truly king, making everything in global trade run super smoothly.Back in the day, like with the Bretton Woods agreement in 1944, currencies used to be tied to the price of gold.But President Richard Nixon cut that direct link when the economy went wild in the 1970s.Ever since that point, money has just kind of moved around on its own in the global markets.The dollar isn't as strong as it used to be. It's losing ground, and a few things are pushing it down faster.

There's been some really shaky policymaking, and folks are starting to wonder if the Federal Reserve is really independent. Plus, Washington's habit of slapping on economic sanctions, like freezing Russia's central bank money after they invaded Ukraine, is definitely playing a role.But don't count the dollar out just yet.The central bank's share of all reserves used to be around 66% ten years back.

Now, it's sitting at about 57%.Economists are saying there's no obvious next person for the job.Other currencies, like the euro, yen, or yuan, just aren't big enough on a global level.So, people are heading back to gold because it's always been seen as the safest and most dependable thing to put your money into.Gold really made a splash last June.

With its price going up, it actually became more important than the euro as a reserve asset, second only to the dollar. That’s pretty telling about where things are heading."Nobody's stepping up to replace the dollar.""So, by its very nature, gold kind of just shines," Gallardo shared.People are going back to what John Maynard Keynes referred to as the 'barbarous relic' since it's not tied to anyone's debt."""
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"""Around half of 50 central banks surveyed by Invesco, an asset manager, are looking to up their gold holdings.Two out of three people we asked are thinking about bringing their gold and silver from overseas storage back home.Rod Ringrow, who heads up official institutions at Invesco, put it simply: "Gold has always been the ultimate safe haven."" "You know, when things get a bit crazy in politics and everything feels shaky, that's when you often see the price of gold shoot up."It acts as a safeguard, a sort of last resort if our regular money systems crash.He also mentioned that after the Russia-Ukraine conflict, using reserves as a weapon made banks think twice about where they kept their gold. This led to a move towards bringing it back home.For a long time, central banks have kept their gold stashed away in places like London, Switzerland, and New York. These spots are pretty much the go-to centers for the worldwide gold trade; they’re known for being really stable.Deep under London, in the Bank of England's vaults, there are about 400,000 gold bars. They're worth more than half a trillion dollars and belong to roughly 70 official organizations.But more and more, people really want to bring home the gold.Venezuela can't get to its $2 billion in gold at the Bank of England because the UK government doesn't see the current Caracas government as legitimate.Russia has been making threats towards Belgium, and that's concerning because a big chunk of their frozen money is kept there.Serbia isn't the only country bringing its gold reserves back home; India, Hungary, and Turkey are also doing it.Poland moved hundreds of tons of gold bars to London, the US, and Canada when World War II began, and now they've brought it all back home.Germany really kicked things off back in the 2010s, deciding to move a lot of gold it had kept in the US and France back home. They'd originally put it there in case the Soviets invaded during the Cold War.Economists are seeing something interesting: countries that grab a lot of gold usually have more political problems with other countries.The World Gold Council says that central banks bought 10% more gold in the year leading up to September. Poland, Kazakhstan, Azerbaijan, and China were the main buyers.Beijing's really been buying up gold, snagging more than 2,000 tons. It’s part of their plan to lessen Washington's money grip, and now they have the sixth-biggest stash globally.Most people think the US has the most gold, around 8,000 tonnes, but no one has officially checked inside the Fort Knox vault since way back in 1953.You know, it's pretty interesting to think about. Back in the late 90s and early 2000s, when gold prices were at rock bottom, the UK government, with Gordon Brown as chancellor at the time, decided to sell off a good chunk of its gold. They owned about 715 tonnes, and they ended up selling 401 tonnes of it. It’s quite striking how things played out.Some folks think cryptocurrencies might compete with gold someday. But central banks are still really cautious about this new, unpredictable market.Right now, gold's doing well again, but not everyone's worried about the dollar losing its top spot.Jonathan Fortun, an economist at the Institute of International Finance, said something interesting, "I don't think losing the dollar's top spot would even be a big worry if we got to the point where we were trading in gold."That would really mess things up, a second-round problem leading to a bunch of other headaches.How can I help you today? Please provide the text you'd like me to rewrite. """Around half of 50 central banks surveyed by Invesco, an asset manager, are looking to up their gold holdings.Two out of three people we asked are thinking about bringing their gold and silver from overseas storage back home.Rod Ringrow, who heads up official institutions at Invesco, put it simply: "Gold has always been the ultimate safe haven."" "You know, when things get a bit crazy in politics and everything feels shaky, that's when you often see the price of gold shoot up."It acts as a safeguard, a sort of last resort if our regular money systems crash.He also mentioned that after the Russia-Ukraine conflict, using reserves as a weapon made banks think twice about where they kept their gold. This led to a move towards bringing it back home.For a long time, central banks have kept their gold stashed away in places like London, Switzerland, and New York. These spots are pretty much the go-to centers for the worldwide gold trade; they’re known for being really stable.Deep under London, in the Bank of England's vaults, there are about 400,000 gold bars. They're worth more than half a trillion dollars and belong to roughly 70 official organizations.But more and more, people really want to bring home the gold.Venezuela can't get to its $2 billion in gold at the Bank of England because the UK government doesn't see the current Caracas government as legitimate.Russia has been making threats towards Belgium, and that's concerning because a big chunk of their frozen money is kept there.Serbia isn't the only country bringing its gold reserves back home; India, Hungary, and Turkey are also doing it.Poland moved hundreds of tons of gold bars to London, the US, and Canada when World War II began, and now they've brought it all back home.Germany really kicked things off back in the 2010s, deciding to move a lot of gold it had kept in the US and France back home. They'd originally put it there in case the Soviets invaded during the Cold War.Economists are seeing something interesting: countries that grab a lot of gold usually have more political problems with other countries.The World Gold Council says that central banks bought 10% more gold in the year leading up to September. Poland, Kazakhstan, Azerbaijan, and China were the main buyers.Beijing's really been buying up gold, snagging more than 2,000 tons. It’s part of their plan to lessen Washington's money grip, and now they have the sixth-biggest stash globally.Most people think the US has the most gold, around 8,000 tonnes, but no one has officially checked inside the Fort Knox vault since way back in 1953.You know, it's pretty interesting to think about. Back in the late 90s and early 2000s, when gold prices were at rock bottom, the UK government, with Gordon Brown as chancellor at the time, decided to sell off a good chunk of its gold. They owned about 715 tonnes, and they ended up selling 401 tonnes of it. It’s quite striking how things played out.Some folks think cryptocurrencies might compete with gold someday. But central banks are still really cautious about this new, unpredictable market.Right now, gold's doing well again, but not everyone's worried about the dollar losing its top spot.Jonathan Fortun, an economist at the Institute of International Finance, said something interesting, "I don't think losing the dollar's top spot would even be a big worry if we got to the point where we were trading in gold."That would really mess things up, a second-round problem leading to a bunch of other headaches.How can I help you today? Please provide the text you'd like me to rewrite.