Gold surpasses the euro to become the world's second-largest official reserve, with JPMorgan forecasting $6,000.

The European Central Bank (ECB) recently reported that due to record-high purchasing volumes and soaring gold prices, gold will account for 20% of global official reserves in 2024, surpassing the euro to become the world’s second-largest official reserve. Emerging market countries are actively buying, with risk aversion and de-dollarization issues continuing to evolve, and JPMorgan forecasts that gold prices could reach $6,000 by 2029.

Gold surpasses the euro to become the world’s second largest official reserve.

Bloomberg quoted the European Central Bank (ECB) in a recent report stating that, driven by record purchasing volumes and soaring gold prices, gold will account for 20% of global official reserves in 2024, surpassing the euro’s 16%, second only to the dollar’s 46%.

Global Central Banks have net purchased over 1,000 tons of gold for the third consecutive year, at a pace that is twice the average purchasing speed before 2022.

Emerging market countries are actively buying in, as risk aversion sentiment and the issue of de-dollarization continue to ferment.

The report shows that Poland, India, and China are the largest gold buyers in 2024. The Central Bank’s increase in gold holdings reflects a defensive stance against geopolitical risks and financial sanctions, as well as the deepening trend of de-dollarization.

In 2024, gold prices rose nearly 62%, further increasing the market value of gold in reserve assets. Gold also increased by 30% this year, becoming one of the best-performing assets of the year.

Interest rate cuts do not affect gold prices, JPMorgan sees a target of 6,000 USD.

Gold prices have shown a strong upward trend recently, repeatedly setting historical highs, primarily driven by geopolitical risks, global Central Bank gold purchases, fluctuations in the US dollar, and safe-haven demand.

Gold prices are typically negatively correlated with real yields, as higher interest rates entice investors away from non-yielding gold. However, the European Central Bank’s report indicates that this relationship broke down in 2022; despite rising global interest rates, central banks around the world accelerated their purchases of gold to guard against sanctions risk.

JPMorgan stated that if only 0.5% of U.S. overseas assets are transferred to gold in the coming years, it could drive gold prices up to $6,000 per ounce by 2029.

Goldman Sachs Group raised its year-end gold price forecast to $3,700 per ounce in April and expects gold prices may reach $4,000 by mid-next year.

This article discusses how gold has surpassed the euro to become the world’s second-largest official reserve, with JPMorgan predicting it could reach $6000. It first appeared in Chain News ABMedia.