The increase of gold positions by central banks can not only keep the exchange rate stable to a certain extent, but also avoid the financial crisis caused by economic globalization to a certain extent, thus adjusting and optimizing the overall risks and benefits of foreign exchange reserve portfolio.

China is a new developing country, but the speed of RMB internationalization is not fast enough. Our central bank has been increasing its gold reserves to fight inflation and guard against risks.

Why do global central banks buy a lot of gold?

The central bank's increase in gold holdings is definitely not just for short-term benefits. There are three main reasons:

First, considering that the international financial market will be more turbulent in the future, the relevant authorities in China can effectively reduce the fluctuation of foreign exchange reserves by increasing gold reserves and ensure the stability of foreign exchange reserves.

Second, due to changes in the international situation, China's foreign exchange reserves have accelerated the diversification of its asset allocation. As a traditional safe-haven currency and super-sovereign currency, gold can provide better asset protection for China.

Third, as China's foreign exchange reserves are increasing, relevant institutions also need to increase their holdings of gold to keep the proportion of gold at a reasonable level.