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How did the Global Financial Crisis impact Central Banks in terms of gold purchasers?

Introduction
What had started in the US transmitted itself around the globe causing major uncertainly and panic, the Financial Crisis, which began in mid-2007, was the first major recession of its kind since the Great Depression of the 1930’s. Most of the developed and developing economies of the world felt the full force of it, causing major declines in financial assets, both traditional ones such as equities and newly-developed ones such as mortgage-backed securities. For two decades prior to the Global Financial Crisis, central banks around the world were net sellers of gold, however, since then, the central banks have begun to buy gold. In a video entitled Gold and silver game changer, Michael Maloney uses the 2008 and 2009 CPM Gold yearbooks to illustrate the “the biggest shift in the bull market since the 70’s”, where in 2009, central banks were expected to sell some 4 million ounces of gold; instead, when the 2009 real numbers came in, they had purchased 15 million ounces. This shift in purchasers has come about due to the distrust central banks place on the US dollar, the major currency in the world and the metal’s ability to act as a ‘safe haven’ in times of economic volatility. Golds distinctive properties and its distinction to fiat currencies make it an attractive investment for anyone’s reserve portfolio, especially during times of economic downturn.
Table 1 CPM 2010 Gold yearbook

Sources of data
All of the data collected and presented in this paper is secondary quantitative research used to demonstrate the ‘why’ and ‘how’ gold is applicable to central banks and its sudden appearance since the Global Financial Crisis. With the study of world gold figures and trends from the world gold council, International monetary fund and the World Bank, I have identified…...

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