Gold Demand by Central Banks: A Comparative Study of Emerging Market and Advanced Economies

摘要

This study investigates the determinants of gold holdings by advanced and emerging market economies for a sample spanning a twenty-eight-year period from 1990 to 2017, including the recent global financial crisis. The dataset is interpreted using panel regression analysis with gold reserves as a dependent variable after fixing the coefficients of the cointegrating relation . Some of the factors affecting gold reserves are differentiated in selected emerging market and advanced economies. While most of the significant factors are common to both groups, energy imports seem to be the distinguishing indicator among the advanced economies. Advanced economies are ranked using the results of the panel corrected standard errors (PCSE) fixed-effects model, whereas emerging market economy results are given according to random effects. This is strongly supported by an economic rationale to hold sizable reserves of gold especially during periods of "heightened uncertainty."