Global central banks cut US T-bill exposure, increase gold reserves

Mumbai: Most countries with top gold reserves have reduced their dollar assets held in US Treasury bills since 2017, the first time Donald Trump took office, an ET analysis showed. Although India has increased in absolute terms its US T-Bill holdings, New Delhi also doubled the share of gold holding in total reserves.

The reduced share of UST in global sovereign savings comes amid political uncertainty, as central banks buy gold with an aim to diversify their foreign exchange reserves.

Gold reserves for India crossed the $100 billion mark for the first time, with total gold reserves at $102.3 billion as of October 10. In the subsequent week as of October 17, gold reserves stood at $108.5 billion, having a weekly increase of $6.2 billion.

Gold prices plunged by as much as 6.3% on Tuesday (October 21), in the biggest drop since 2013, and held losses through Friday to close at $4,113.05 an ounce. In dollar terms, its $138.77 weekly drop was among steepest ever, Bloomberg data showed. This price drop is also expected to increase demand from investors, including central banks. “We expect de-risking and profit taking by investors to be met by dip buying from other segments of demand including central banks and other physical buyers,” Gregory Shearer at JPMorgan Chase & Co. said .