Central banks have been big buyers of gold for over 10 years. Here is why they do it.

Reuters

• A number of central banks have loaded up on gold in the last year, according to data from World Gold Council.
• Central banks own gold as part of their portfolios, which include foreign exchange reserves. 
• Gold hit record highs above $2,000 an ounce this month, before seeing its biggest daily drop in 7 years earlier this week. 
• UBS Asset Management's Max Castelli expects central banks to continue buying gold even once COVID-19 is over, given their long-term investment horizon. 
• "We expect this trend to continue – particularly if gold prices remain elevated once the current crisis is over," he said. 
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Gold is one of the best performing asset classes in 2020. Its status as a safe-haven in times of economic crisis, together with its tendency to profit from a weaker US dollar, has driven investors into the market in droves. 

In fact, investors, via exchange-traded funds, now own more gold than most central banks.

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