Recently it was announced that the Reserve Bank of India has just bought 220 tons of gold from the International Monetary Fund (IMF) for $6.7 billion. This may be a sign that other central banks may also move away from dollar-denominated assets like Treasury bonds in favor of the precious metal.

India’s huge purchase means that gold will now account for about 6 percent of India’s $285.5 billion of foreign exchange reserves — up from the previous level of about 4 percent.

News of the purchase of nearly half of the 403.3 metric tons of gold earmarked for sale by the IMF boosted gold prices, reminding investors that central bank reserve diversification will continue to fuel demand for the metal.

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