ANALYST: Central Banks Are Set to Pile Into Gold

 Simona Gambarini of Capital Economics writes in a note:

[H]igh gold prices haven’t prevented the official sector from increasing their gold reserves in the past. What’s more, according to a Fitch Ratings report, the level of negative-yielding global debt has risen to almost $12 trillion in July, a 12.5% increase since the end of May as the economic and political uncertainty following the UK’s vote to leave the European Union (“Brexit”) has boosted demand for safe havens. With rates having turned negative in most of Europe and Japan and likely to remain so for some time on "Brexit" woes, the opportunity cost of holding gold has all but disappeared...

In particular, we expect central banks from developing economies to be the main source of demand from the official sector in the future,