Asset freezes and rising debt reshape central bank gold demand
Bank of Italy Deputy Governor Sergio Nicoletti Altimari told the Global Precious Metals Conference on October 5, 2026, that geopolitical asset freezes and fiscal expansion are reshaping sovereign reserve strategies and weakening the traditional link between gold prices and real yields.
Yield correlations break under fiscal pressure
Speaking in Sorrento, Nicoletti Altimari pointed to a structural shift in gold demand since 2022.
While jewelry consumption has moderated due to elevated prices, emerging market central bank purchases and ETF inflows have expanded.
The Deputy Governor attributed this reallocation to heightened geopolitical risk following the freezing of Russian foreign reserves, which exposed vulnerabilities in holding foreign currencies abroad.
Furthermore, the “debasement trade” has accelerated amid persistent fiscal expansion and elevated public debt in major economies.
These twin pressures fundamentally weakened the traditional inverse relationship between gold prices and real yields throughout 2025 and early 2026, alongside a notable rise in market volatility.
Strategic autonomy in 2,450 tonnes
Italy remains the world's fourth largest official gold holder with 2,450 tonnes of reserves.
Rebuilt after wartime looting through post-war export surpluses, the portfolio was retained even as other central banks offloaded non-yielding bullion in the early 2000s.
Nicoletti Altimari emphasized that gold carries no default or credit risk because it is “no one's liability.”
This unique status, combined with historical crisis performance, preserves its strategic role as an ultimate backstop.
A quiet indictment of fiat reserves
Central banks are acknowledging that reserve asset freezing and fiscal expansion eroded trust in conventional sovereign debt.
Gold's decoupling from real yields confirms this fundamental shift away from fiat paper.
Portfolio diversification is no longer an optimization exercise, but self-preservation against geopolitical fracture.
Source: Gold between continuity and change
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