Kazakhstan has joined several other countries in boosting their gold reserves this year, as coronavirus impacts the economies of countries worldwide.

Kazakhstan is currently enjoying relatively low national debt of around 25.2% of its GDP (for comparison, the UK currently has debt at 101.9% of GDP). The lack of debt allowed for the expansion of foreign currency reserves and gold, bringing the country’s reserves up to a record 388.3 tonnes last quarter.

The central bank has since sold 9.8 tonnes of this in an effort to generate more cash as it battles growing coronavirus cases, while keeping reserves at a near record level of 378.5 tonnes.

Kazakhstan Central Bank

Gold reserve purchases have slowed globally in 2020 overall, with large scale gold buyers such as China and Russia pausing their previous purchase sprees. Central banks have faced some of their hardest challenges in history this year, with many politicians turning to them to keep economies afloat during lockdowns.

That this has coincided with the gold price reaching record levels has also no doubt impacted decisions on how much gold to buy in the short term while budgets are so constricted.

Kazakhstan is not the only country to add its reserves this year however, with India and Qatar both adding gold to shore up their own weak currencies with the dollar-denominated precious metal. Turkey also continues to expand on its growing reserves, adding an impressive 19.4 tonnes in July alone and taking the country to 583 tonnes.

With gold prices expected to rise further, more countries could take the opportunity to protect national reserves with the precious metal before the next bull-run.

Central banks will however be all too aware that cash reserves may be needed in the event of further economic deterioration, and could therefore be forced to hold onto cash for longer – cash being devalued by their own low interest rates, and growing inflation.