According to the World Gold Council, central banks added $70 billion of gold to their stockpiles over the last twelve months, the highest purchase in 70 years.
Emerging economies were the main buyers, underlining a shift in attitudes to gold since the 1990s when central banks sold hundreds of tonnes yearly.
The yellow metal is expected to hold its value through the turbulent times ahead, enabling central banks to diversify from U.S. Treasuries and the dollar.
Buying dipped during the Covid pandemic but accelerated in the second half of 2022. Central banks (including those of Russia, Turkey, China, India, Egypt, and Qatar) purchased 862 tonnes between July and December, says the WGC.
Central bank purchases took global gold demand last year to a whopping 4,741 tonnes, the highest since 2011. The buying spree hasn’t stopped, but the World Gold Council says it’s unlikely to match 2022 levels due to lower reserves.
For new trading ideas, see top gold stocks for capital preservation.
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On the date of publication, Andy Mukolo did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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