Demand for gold surged ahead of the G7 meeting.
The Russian central bank said demand for gold surged as emerging countries stepped up diversifying their reserves ahead of a G7 meeting on frozen Russian assets.
The Russian central bank believes that central banks in many emerging economies are increasing their gold purchases to protect foreign exchange reserves, amid discussions at the G7 on how to use hundreds of billions of dollars worth of frozen Russian assets.
This event made gold a more preferred safe-haven asset, especially for countries seeking to mitigate risks from the US dollar and the Western financial system.
Gold prices have risen 59% since the beginning of the year and are heading for their biggest gain since 1979, after hitting a record high of $4,381 per ounce on October 20.
The desire for a safe haven amid geopolitical tensions and concerns about US tariffs is contributing to gold prices reaching new highs. The Russian central bank believes that uncertainty about global growth is further driving capital flows into gold.
A Russian report indicated that gold continues to benefit from steady buying by central banks in emerging markets. The trend of diversifying reserves continues amid G7 debates over the use of $300 billion in frozen Russian assets, of which €210 billion is held in Europe and €185 billion is held at Euroclear in Brussels.
Russia announced that its total gold and foreign exchange reserves reached $734.1 billion as of November 14. This large reserve size helps Moscow maintain financial stability amid prolonged sanctions and ongoing international disputes.
