Gold has been in the trouble from last few days but its price has been risen 11% lately. A phenomenon which has not been seen since years took place when the central banks across the globe started buying larger quantities of gold. According to World Gold Council , they have increased their treasury with an annual increase of 74% that amounts to 651.5 tons .
Russia, Poland, Kazakhstan and other future rising markets are seemed to be the big buyers of gold last year. Even while major problems with U.S.A. and China , gold became a useful weapon for most countries. With the major price fluctuations with gold and dollar , it is still kept by most countries as a substitute.
These emerging markets are holding more gold reserves as no one knows when these trade disputes will solve. If these disputes go out of hand then it eventually appreciate the price of dollar . Second major problem that will happen when countries start holding gold reserves more than dollar as an another medium of trade between countries. As this reduces the holding capacity of dollar between countries and trade will not routed through dollars.
Although the trade wars was an alarming signal for most countries , economies have been benefited from good gold treasury. Gold has proved out to be a safe spot for central banks. While looking at the last year data , gold has doubled with respect to local currency. Higher chances of gold fluctuation will be seen now but due to stress in global economy it will hold a good tight in future.