Editorial | Hong Kong’s push to be a gold reserves hub is the right move
The government is right to capitalise on the sustained gold rally, as demand for the safe-haven asset rises amid geopolitical uncertainty
With falling interest rates, geopolitical tensions and uncertainty about world economic growth, gold remains the classic safe-haven asset.
As Secretary for Financial Services and the Treasury Christopher Hui Ching-yu has pointed out, the precious metal acts as a hedge “against various geopolitical and market risks”. This makes the reserve project a worthwhile effort with minimal risk.
Central banks worldwide continue to stock up on gold to diversify their reserves and hedge against risks, especially from erratic US tariff policies. They bought 480 tonnes of gold in the first half of this year, an increase of 12 per cent from the same period a year ago, according to the latest data.
Repeated attempts made by US President Donald Trump to intervene in the monetary policy of the US Federal Reserve have also buttressed the price of gold, as investors question the Fed’s independence that has long been taken for granted.