The Bank of England gold custody added 8,009,000 troy ounces amid the COVID-19 pandemic between December 2019 and December 2020, according to data researched by Trading Platforms UK.
This translates to an addition of 248 tons, since one troy ounce is equivalent to 0.031 kilograms, making it the biggest gold custody amount since 2013.
The analysis also overviewed the BoE’s gold custody holding between 2011 and 2020, which has grown from 178,344,000 to 180,757,000 troy ounces.
The current holdings of 180,757,000 troy ounces are the highest since December 2013, when the institution held 182,278,000 troy ounces in gold.
Furthermore, BoE gold reserves have been on the rise since March 2016, when the haul stood at 150,873,000 troy ounces.
“BoE’s increasing gold reserves in 2020 was a direct side effect of the economic shock initiated by the coronavirus pandemic,” the report said, explaining the drivers for increased gold accumulation in the BoE custody.
“Historically, gold is the world’s oldest safe asset, always thriving in times of uncertainty. Gold offered a hedge against inflation due to the government’s response to the pandemic.”
Faced with uncertainties from the health crisis, a shaky monetary policy, alongside unprecedented fiscal stimulus to economic consequences of lockdowns, most global currencies were poised to weaken, leaving gold as the primary hedge.