How central banks use gold bullion

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Central banks hold gold for a variety of reasons: to trade it for financial purposes or to adjust the level of the reserves, to deposit it to earn interest, or to use it as collateral for market loans.

All the leading central banks have large positions in gold and are among the principal global holders of bullion. In recent years they have once again become net purchasers of gold, after two decades as net sellers. There is now widespread interest in gold loans owing to the rise in yields as global gold production diminishes.

Lastly, in view of gold’s importance on international financial markets, many of the leading central banks have agreed to limit their market transactions, especially their sales. Under the Central Bank Gold Agreement (fourth version, dated September 2014) the central banks act in concert to prevent a disruption of the gold market. The Bank of Italy was among the initial signatories in 1999 to what was then known as the Washington Agreement. As a result its gold management policy conforms with the dictates of these international agreements.