Commodities Buzz: Case for further diversification into gold remains significant, says Bundesbank President Joachim Nagel

Joachim Nagel, President of the Deutsche Bundesbank has stated that after the global financial crisis, Central banks returned as active buyers of gold, most notably those of China and Russia. Gold prices entered a sustained upward trend, despite considerable fluctuations during the 2010s. Furthermore, the accumulation of foreign exchange reserves slowed down noticeably. As a result, gold as a share of global reserves rose from 10 percent in 2009 to around 14 percent in 2023. From 2023 to 2025, the share of gold in global reserves jumped to almost 25 percent. The main driver has been the sharp increase in gold prices. He noted further that the recent rise in global government bond yields has boosted the relative attractiveness of debt securities again. At the same time, rising debt levels have increased concerns about the credit risk of these assets. Furthermore, geopolitical risks are likely to continue to shape reserve management decisions. Taken together, the case for further diversification into gold remains significant.

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