Bundesbank President: The case for further diversifying gold allocations remains strong.

Bundesbank President Joachim Nagel said rising government debt levels strengthen the case for central banks to hold more gold. He said on Monday that the recent rise in global government bond yields has once again increased the relative appeal of debt securities, while at the same time higher debt levels have intensified market concerns about the credit risk of these assets. In addition, geopolitical risks may continue to influence reserve management decisions. Speaking in Sorrento, Italy, Nagel concluded that for central banks, the case for further diversifying into gold remains strong. Germany holds the world's second-largest gold reserves, but its holdings have remained broadly stable in recent years, while other monetary policy institutions have sharply increased purchases. The Russia-Ukraine conflict was a key catalyst, as some central banks stepped up gold buying after Washington imposed sweeping financial sanctions on Russia. More recently, concerns about the United States' growing debt burden have heightened market expectations that central banks may diversify, reduce reliance on the dollar, and further increase gold holdings.