Institutions: A soaring dollar could dampen demand for gold purchases by central banks
Large-scale purchases of gold by central banks have been one of the factors supporting the rise in gold prices, and the current surge in the dollar may curb demand from central banks. Central banks have bought 694 tonnes of gold this year to diversify their holdings and reduce their reliance on the dollar, according to the World Gold Council. George Saravelos, head of foreign exchange research at Deutsche Bank, said Mr. Trump's policies could weaken emerging market currencies. "Many central banks now need to use their dollar reserves to protect their foreign exchange from capital outflows and prevent exchange rates from weakening too much," he said.