Bundesbank President Nagel said on Monday that rising government debt levels
strengthen the case for central banks to increase gold holdings. He noted recent
rises in global government bond yields have made bonds relatively more
attractive, but mounting debt heightens credit-risk concerns for those assets
and geopolitical risk could influence reserve management. Germany holds the
the world’s second-largest gold stock but its holdings have been largely unchanged
while other central banks have stepped up purchases, a trend accelerated by the
Russia-Ukraine conflict and broad US financial sanctions. Growing market concern
about rising US debt has increased expectations that central banks may reduce
dollar exposure and expand gold reserves.
