The State Oil Fund of Azerbaijan (SOFAZ) is planning to increase the share of gold in its investment portfolio to 25% this year, SOFAZ stated in response to APA-Economics' inquiry.
It was noted that the amount of gold purchased during the current year, in line with the Investment Policy, will depend on the price of gold on the market as of the relevant date.
The Fund stated that in addition to gold being considered a reliable investment instrument that preserves its value over the long term, it is also regarded as an effective defense mechanism against inflation risk: "Amid geopolitical tensions and instability in global markets, increasing gold reserves is strategically important in terms of risk reduction along with diversifying foreign currency reserves. It should be noted that overall investments in gold in the financial markets in 2024 increased by 25% reaching 1,180 tons compared to 2023, which is the highest indicator in the last four years."
It should be noted that the amount of gold purchased by SOFAZ by the end of 2024 made up 146.6 tons, which accounts for 20.6% of the portfolio based on the market price at the relevant date.
According to the investment policy set by the Fund, the maximum investment in gold can be up to 25% of the total value of the investment portfolio. In other words, the Fund is planning to bring its gold portfolio to the maximum limit.
Source: en.apa.az
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