During an open forum at Harvard’s Kennedy School of Government, Tekoa Da Silva, publisher of Bull Market Thinking, asked Mario Draghi why central banks are so interested in gold pointing out that central banks have increased their holdings significantly over the last few years.

Central bank gold is a reserve of safety, providing "fairly good protection against fluctuations of the dollar and risk diversification," according to Mario Draghi, former Governor of the Bank of Italy and President of the European Central Bank (ECB). 

While Ben Bernanke would prefer not to discuss the barbarous relic, having noted in the past that "nobody really understands gold prices," it would seem his European brother-in-arms has a different opinion. 

Here is a video of the dialogue concerning recent gold reserve changes by central banks:

Tekoa Da Silva (Bullmarketthinking.com): Dr. Draghi what are your thoughts on gold as a reserve asset, you have the central banks like China and  Russia increasing their reserves especially in the last 10 years, Germany for example asking for its holdings back from New York, it doesn't offer any income unless its leased,  why do you think they would want that and what value do you think it will offers in your opinion?

Mario Draghi (ECB): Well you’re also asking this to the former Governor of the Bank of Italy, and the Bank of Italy is the fourth largest owner of gold reserves in the world, which is out of all proportion to the size of the country. But I never thought it wise to sell it, because for central banks this is a reserve of safety, it’s viewed by the country as such. In the case of non-dollar countries it gives you a value-protection against fluctuations against the dollar, so there are several reasons, risk diversification and so on. So that’s why central banks which have started a program for selling gold a few years ago, substantially I think stopped…most of the experiences of central banks that have leased or sold the stock of gold about ten years ago, were not considered to be terribly successful from a purely money viewpoint.