Daily Gold Market Report

Gold tracks lower in cautious end of week trading
Eurizon reports sharp decline in global dollar reserves, gold a beneficiary

(USAGOLD –4/21/2023) – Gold tracked lower this morning as uncertainty over the rate picture lingered, worry about the banking system cooled, and cautious end of week trading prevailed. It is down $17.50 at $1990. Silver is down 15¢ at $25.22. A recently released study by Eurizon SLJ Asset Management finds that the dollar’s share of total global reserves declined sharply in 2022 while its status as the dominant currency in international trade remained “unchallenged” – a differentiation we have not seen referenced by other analysts.

“In a Monday note, strategists Joana Freire and Stephen Jen calculated that the greenback accounted for about two-thirds of total global reserves in 2003, then 55% by 2021, and 47% last year. ‘This 8% decline in one year is exceptional, equivalent to 10 times the average annual pace of erosion in the USD’s market share in the prior years,’ the authors said.” [Source: Markets Insider, 4/17/2023)

Editor’s note: Gold has been one of the primary beneficiaries of that 8% shift in global reserves. The World Gold Council reports record central bank purchases of 1136 metric tonnes in 2022. “There has been a concerted shift away from over-reliance on the US dollar as a reserve currency in an environment of non-existent real yields on sovereign debt,” writes the Council’s Louise Street in a recent market review.

Cartoon courtesy of MichaelPRamirez.com