Why central banks keep buying gold

Central banks hold gold because it is one of the few reserve assets that is no one else's liability. A government bond depends on the issuer paying; a bar of gold in a vault does not.

Reserve managers also value gold's liquidity. The global gold market trades continuously across London, New York, Shanghai and other centers, which lets large holders adjust positions when needed.

Diversification is the third reason. Gold has historically behaved differently from currencies and bonds during periods of stress, so a measured allocation can steady the overall value of a reserve portfolio.

For individual savers, the lesson is not to copy central banks, but to understand why the world's most conservative investors treat gold as a long-term anchor rather than a short-term trade.