Central banks remain positive on gold amid the COVID-19 crisis, according to the World Gold Council’s (WGC) recent survey.

As the survey results showed, 20 percent of respondents say that they plan to add gold to their reserves during 2020, up from 8 percent in the 2019 survey.

The results also indicated shifts in investment attitudes towards gold as the impact of the COVID-19 pandemic continues to affect the global financial and economic outlook, according to the WGC survey.

Given that the survey has polled 51 central banks on the themes which are relevant for their investment decisions, the overwhelming majority (88 percent) picked “negative interest rates” as relevant.

This view will probably be reinforced in the post-COVID-19 era as continued monetary expansion will keep global rates low or negative for the foreseeable future, a situation that increases gold’s attractiveness (“opportunity cost”) relative to fixed income.

“Historical position” and “Long-term store of value” were the top two factors behind central banks to hold gold reserves for many years, yet, Gold’s “Performance during times of crisis” has risen to become the third most relevant factor (79 percent), up from fifth place in the 2019 survey (59 percent).

Similarly, other investment-related factors like “No default risk”, “Effective portfolio diversifier”, and “Highly liquid asset” all saw significant increases in their relevance in 2020, according to the survey results.

“The COVID-19 pandemic may have reshaped thinking towards risk management and the need for portfolio diversification, leading to these factors for holding gold gaining more prominence,” the WGC said.

On the other hand, the survey showed that merging market and developing economies (EMDEs) rated nearly every factor as more relevant than their advanced economy counterparts, which underscores the differences in reserve management philosophies between advanced and emerging countries, and may explain why emerging market central banks have been the driving force behind official sector gold purchases in the last decade.

Regarding the central bankers’ expectations for changes in the level of gold holdings during 2020, three-quarters say that global central bank gold holdings will increase in 2020, up from 54 percent in 2019, while respondents believe that global central bank gold holdings will decrease, according to the survey results.

Furthermore, 20 percent of central banks will add gold to their own holdings in 2020, up from 8 percent last year.