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Central banks do not deal in gold and have not for decades, some for nigh-on a century.

• carlosjobim 3y ago
  From 2023: "China has spearheaded record levels of central bank purchases of gold globally in the first nine months of the year, as countries seek to hedge against inflation and reduce their reliance on the dollar. Central banks have bought 800 tonnes in the first nine months of the year, up 14 per cent year-on-year, according to a report by the World Gold Council, an industry group." https://www.ft.com/content/abc39431-1755-4906-b11e-ee9e53baadfe https://www.ft.com/content/abc39431-1755-4906-b11e-ee9e53baa...
  • jpc0 3y ago
    > hedge against inflation and reduce their reliance on the dollar If I am dealing in X I don't buy more X incase X's value decreases The parent comment is correct, gold hasn't been a standard for a long time to base the value of currency on. It is simply a commodity with a relatively stable value up until now. The only thing currency value is based on is how much people are willing to pay for it and as correlation to that how many people are willing to accept it as payment. I invite you to walk into your local grocery store and attempt to pay in anything other than your local currency, you will fins out just how worthless that is as a currency. So for me, a non-US citizen who isn't doing any dealing with people willing to accept dollars, dollars are as much a currency as pet rocks are. They can be converted into currency but they are not currency. Gold holds the same property although I would much rather hold gold than US dollars and that is where your quote on central banks come in. I'm much more likely to get the same amouny of currency from gold than from US dollars on the future should I choose to sell it.