Central banks repatriating gold; India emerges as prime investment destination for sovereign investors: Survey

livemint.com:

Asset Management Study published on Monday, more than 85% of the 85 sovereign wealth funds and 57 central banks that took part in the annual survey believe that inflation will now be higher in the coming decade than in the last. A central bank in the West noted, “I think that inflation will not return to where it was in the last five years. The main question mark is how sticky it is.

In the past it has been surprising how persistent inflation can be." As per the survey, sovereign money managers are ‘fundamentally’ rethinking their strategies on the belief that higher inflation and geopolitical tensions will prevail. Gold and emerging market bonds are seen as good bets in that environment, but last year's freezing of almost half of Russia's $640 billion of gold and forex reserves by the West in response to the invasion of Ukraine also appears to have triggered a shift, Reuters reported. The survey showed a "substantial share" of central banks were concerned by the precedent that had been set.

Almost 60% of respondents said it had made gold more attractive, while 68% were keeping reserves at home compared to 50% in 2020. “We did have it (gold) held in London... but now we've transferred it back to own country to hold as a safe haven asset and to keep it safe," quoted one central bank.