Central banks around the world are stockpiling gold in a big way – and appear poised to do so even more.

According to a recent central bank survey conducted by the World Gold Council, gold remains a favorable reserve asset globally.

Central banks buy and hold gold for many of the same reasons that retail investors do.

They want to diversify their reserves and hold liquid assets that, ideally, retain purchasing power over time.

Amid recent geopolitical strife and an explosion of the U.S. money supply in response to Covid-19, countries are increasingly unsure about the Federal Reserve Note's longer-term standing as global reserve currency in international commerce.

Four-fifths, or 80%, of central banks hold gold in their reserves, according to the 2021 Central Bank Gold Reserves Survey.

Seven out of 10 central banks that reported currently not holding gold listed "preference for better yielding or higher returning assets" as the reason why.

This doesn't come as a surprise, as institutional money managers myopically chase nominal returns without consideration of whether their real, inflation-adjusted returns might actually be negative.