Iveta Polášková, Luboš Komárek, Michal Škoda
This paper is devoted to the monetary policy context of gold in central banks’ reserves. It examines the correlation between the nominal and real price of gold and selected macroeconomic variables and financial assets over the financial and business cycles. In this context, it analyses the investment diversification opportunity that gold offers central banks and other investors. The paper also highlights differences in gold holdings between the central banks of advanced economies (including those with reserve currencies) and those of emerging market and developing economies. It goes on to outline the history of gold holdings from the establishment of the independent Czechoslovakia at the end of 1918 to the present day. It concludes by presenting the rationale for the position of the CNB, which ranks among the modern central banks holding minimal amounts of reserve gold.
JEL Codes: E42, E58, F33, Q31
Keywords: Central bank, gold, international monetary system, international reserves
Issued: October 2019
Download: RPN No. 1/2019 (pdf, 459 kB)