Countries Repatriating Their Gold Due To Sanctions

More countries are repatriating gold reserves as protection against the sort of sanctions imposed by the West on Russia, an Invesco survey of central bank and sovereign wealth funds published, Marc Jones reported for Reuters.

Photo Insert: Gold and emerging market bonds are seen as good bets in that environment, but last year's freezing of almost half of Russia's $640 billion of gold and forex reserves by the West due to the Ukraine invasion triggered a shift.

The financial market rout last year caused widespread losses for sovereign money managers who are "fundamentally" rethinking their strategies on the belief that higher inflation and geopolitical tensions are here to stay.

More than 85% of the 85 sovereign wealth funds (SWFs) and 57 central banks that took part in the annual Invesco Global Sovereign Asset Management Study believe that inflation will now be higher in the coming decade than in the last.

Gold and emerging market bonds are seen as good bets in that environment, but last year's freezing of almost half of Russia's $640 billion of gold and forex reserves by the West due to the Ukraine invasion triggered a shift.

Almost 60% of respondents said it had made gold more attractive, while 68% were keeping reserves at home compared to 50% in 2020.

Only 7% believe rising US debt is negative for the greenback, although most still see no alternative to it as the world's reserve currency. Those that see China's yuan as a potential contender fell to 18% from 29% last year.

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