ALBAWABA – The Central Bank of Iraq boosted gold reserves by 2 percent last week in a single-day purchase, Bloomberg reported, as part of a gradual plan to stock up on the precious metal.
Iraq bought 2.5 tons in bullion of gold on Thursday, bringing its reserves to 132.73 tons, Mazin Sabah, director general of the central bank’s investments department, said in an interview in Baghdad.
The strategy is to acquire more gold in the second half of the year, Sabah said.
The decline in gold prices and the rising economic uncertainty drove the central bank to invest in gold, the New York-based news outlet explained.
Central banks around the world are expanding their gold reserves amid escalating geopolitical and economic risks.
Iraq resumed gold purchases in 2022 after a four-year hiatus. Part of a program to diversify its roughly $100 billion worth of foreign assets, according to Bloomberg.
The central bank bought 34 tons of gold last June, raising its reserves by 35 percent.
It stores bullion with the Bank of England and the Bank of France, according to the news outlet.
Gold prices have been declining for three consecutive weeks against signs of a loss of resilience in the US economy, as the Federal Reserve is expected to raise interest rates again in June.
Demand for gold has declined, Bloomberg highlighted, as investors turn to the precious metal when rates are low, not high.
Worldwide gold demand for central banks dropped 40 percent in the first quarter of 2023, to 228.4 tons, as per a report from the World Gold Council. Far from a record low, yet indicative of a cooling global gold market, at the institutional level.
