Gold has soared since late 2021, and Colombia has ridden that wave. As the metallic climbed from roughly $1,828 an oz. to new highs above $4,000 this October, the central financial institution’s bullion e book worth rose considerably.
It elevated from about $281 million on the finish of 2021 to roughly $447 million on the finish of 2024. Over 4 years that delivered round $123 million in positive aspects.
Here’s the catch: gold continues to be tiny in Colombia’s struggle chest. It represents lower than 1%—about 0.7%—of roughly $66 billion in worldwide reserves. The actual buffer is the majority of reserves held in liquid foreign-currency belongings.
Those reserves have grown over time—about $46.7 billion in 2016, $59.0 billion in 2020, and round $62.5 billion in 2024—giving policymakers respiration room when markets flip tough.
The story behind the story is world nervousness. Investors have piled into traditional protected havens as they weigh sticky inflation, shifting U.S. interest-rate expectations, and commerce and geopolitical friction—particularly U.S.–China tensions.
When individuals get nervous in regards to the outlook, they purchase insurance coverage. Gold is a type of insurance policies, and its worth leap has pulled Colombia’s valuations up with it.
Colombia’s Gold Rally Supports Budgets Amid Global Risks
On the bottom, excessive costs are reshaping the true economic system, too. So far this 12 months, gold made up about 40.7% of Colombia’s mining exports—roughly $2.7 billion out of $6.6 billion—with the United States, the United Arab Emirates, Canada, Switzerland, and Italy among the many main patrons.
Through June, round 15% of mining royalties got here from the valuable metallic, a helpful increase for native budgets that additionally heightens the necessity for rigorous traceability and environmental requirements.
Why this issues past Colombia: the rally is a sign about world threat urge for food. Colombia’s determination this month to finish its precautionary IMF backstop means its personal reserves must do extra of the calming.
Rising gold helps on the margin. But whether or not Colombia—and rising markets extra broadly—trip out the subsequent scare will rely way more on the dimensions and administration of their total reserves, sound coverage, and investor confidence than on the dimensions of the bullion stack.
