Chile Central Bank issues first gold purchase in decades amid global turmoil

Chile’s Central Bank issued its first major gold purchase since at least 2000, adding a “limited portion of gold” into its reserves in order to improve risk diversification in the face of more frequent and complex episodes of external uncertainty, the entity said Thursday.

In February, the bank boosted its gold reserves to $1.108 billion, up from $42 million in January, equivalent to 2.2% of total reserves.

Central Bank documents show it was the first purchase of gold since at least 2000. Gold prices have been surging, topping $5,100 per ounce as it’s seen as a safe haven amid global uncertainty.

“The most recent assessment found changes in the correlations between eligible assets, so incorporating a limited portion of gold helps improve the portfolio’s risk diversification,” the bank told Reuters.

The Central Bank said the decision stemmed from periodic technical evaluations to define the composition of currencies and instruments in which the reserves are invested.

The strategic value of gold as a safe-haven asset “strengthens portfolio protection against financial stress scenarios, in a context where episodes of external uncertainty have become more frequent and complex,” the bank said.

(By Fabián Cambero and Alexander Villegas)