Johannesburg - The biggest drop in gold prices since 1983 is “extremely concerning” and reflects the uncertain outlook for the global economy, South African Reserve Bank Governor Gill Marcus said.
The central bank will continue to accumulate bullion as part of its reserves and won’t adjust its policy, Marcus told reporters in Cape Town today.
Gold dropped 14 percent in the two days through yesterday.
“The fact that it has done this dramatic dive is extremely concerning,” she said.
“It’s a reflection of the uncertainty in the global environment.”
The central bank has been buying foreign currency and gold reserves to protect against swings in the rand, the most volatile of the 16 major currencies tracked by Bloomberg.
The world’s central banks hold about 19 percent of all the bullion ever mined and boosted holdings of the metal last year by the most since 1964.
South Africa’s gold and foreign currency reserves at the central bank dropped 0.7 percent to $50 billion in March. - Bloomberg News