Central banks across the world are snatching up gold at a rate not seen in several years.
The World Gold Council has found that global spending by central banks on gold has reached the highest level since the fourth quarter of 2015. In the third quarter of this year, central banks bought over 148 metric tons of gold, marking a 22% increase on the same period last year.
Gold buying was led by Russia, whose central bank purchased over 92 tons of gold. Other big buyers included Turkey, Kazakhstan, India, Poland, and Hungary. Based on a current price of $1,223 per troy ounce, these purchases totaled $5.82 billion.
CNBC suggests that gold buying could be a means for countries to insulate themselves from the potential risks surrounding currencies and potential drops in value—particularly the U.S. dollar. Nevertheless, the dollar increased by 0.7% in the same period, while the price of gold actually fell, dropping to its lowest level since January 2017.
Net gold demand in the third quarter was 964.3 tons, 6.2 tons higher on a year-on-year basis, according to CNBC.