Central banks are buying gold as a zombie-apocalypse hedge
Bullion purchases have surged among countries facing uncertainty
The instruction manual for surviving a zombie apocalypse is pretty straightforward. Once you’ve kitted out your bunker with canned goods and firearms, get a supply of bullion. You’ll need it to buy bullets and bribe your way out of a death fight in Thunderdome. That’s a line of thinking you might associate with cranky gold bugs, but it’s not too far away from the rationale behind fund flows in the precious metals market right now—and nations are doing it. Central banks bought 400 metric tonnes of gold in the September quarter, by World Gold Council data. That’s a record inflow on a par with what they’d purchase over a whole year in normal times. In the opaque world of government gold trading, it’s not always immediately clear who the biggest buyers are. Monetary authorities are such big players that they can distort the market, one reason that prices plummeted in the 1990s and 2000s when some European central banks sold in unison.