The Central Bank of Iraq boosted its gold reserves by about 2% in one day last week as part of a gradual plan to increase stocks of the precious metal, which is seen as a traditional haven in times of economic crisis.
For his part, the Director General of the Investments Department at the Central Bank, Mazen Sabah, said in an interview with “Bloomberg” agency in the capital, Baghdad, that Iraq bought 2.5 tons of bullion on Thursday, bringing its reserves to 132.73 tons, according to what was seen by Al Arabiya.net. Sabah said the strategy is to get more gold in the second half of 2023.
“Our current plan is to buy small quantities several times, not a large amount at once,” he added.
Central banks around the world are expanding their bullion holdings amid mounting geopolitical and economic risks. Iraq, the second largest oil producer in the Organization of the Petroleum Exporting Countries (OPEC), has resumed its purchases of gold in 2022 after a 4-year hiatus, as part of a program to diversify its foreign assets amounting to about $100 billion.
The Central Bank of Iraq bought 34 tons of gold last June, a one-time increase of 35% in its holdings. The bullion is stored at the Bank of England and the Bank of France.
Sabah said the central bank’s approach is to increase its reserves of gold whenever the price of the precious metal reaches a level that is in line with investment management guidelines.
Gold, which was close to a record high earlier this month, posted a third straight weekly loss, as signs of resilience in the US economy increased the likelihood that the Federal Reserve would continue to raise interest rates.
Demand for gold from central banks fell to 228.4 tons in the first quarter, down 40% from the previous three months, according to a report by the World Gold Council. Although this remains strong, it is the second consecutive quarter of decline, in a sign that the historic bullion tunnel for institutions may be coming to an end.