Some Central Banks around the world have accumulated gold to reinforce their currencies in the face of an uncertain global environment. Find out which are the main countries that are reinforcing their financial reserves through the accumulation of this precious metal.
According to the “Metals Focus” report by the World Gold Council, some central banks doubled their gold demand, setting new records during Q1 2024.
Rising Trend
In Q1 2024 the net demand for gold by central banks reached 290 tons, the highest amount for Q1 since 2000 and 69% higher than the quarterly average of the last five years. The reported purchases were led by China, Türkiye and India.
With the central banks accelerating their gold purchases to over 1,000 tons per year in 2022 and 2023, the importance of its contribution to gold’s global demand is evident. Representing almost a quarter of the total demand of gold in both years, many consider the interest of the central banks for gold as a key factor behind the recently accelerated increase in its price.
Year-to-date Central Bank Net Purchases and Sales by Country
Türkiye 🇹🇷
The Central Bank of Türkiye continued accumulating gold during the first quarter of 2024. It acquired 30 tons during the period, raising their gold reserves to 570 tons. The sale that occurred in March of last year was not repeated, despite the continued shortage in the domestic gold market due to high demand. Thereby, Türkiye’s Central Bank added gold to its reserves for ten consecutive months.
China 🇨🇳
The People's Bank of China maintained its recent momentum during this period adding 27 tons to its gold reserves in Q1 of 2024. This was its 17th consecutive monthly increase, raising its reported gold reserves to a total of 2,262 tons (16% more than in October 2022).
The above is explained by the clear de-dollarization strategy that China has implemented over the last two years. According to data from the United States Department of the Treasury, during Q1 2024 China reduced its holdings of dollar-denominated assets (mainly Treasury Bonds and other US government agencies) by an amount of more than $53.3 billion, a historical record figure for China.
India 🇮🇳
In one of the fastest growing emerging market economies, the Reserve Bank of India increased its gold reserves by 19 tons during Q1 2024, exceeding its total purchases of gold carried out during 2023, which totaled 16 tons, according to the World Gold Council.
Other Countries
Other notable gold buyers during Q1 2024 are the National Bank of Kazakhstan (16 tons), the Czech National Bank (5 tons), the Central Bank of Oman (4 tons), the National Bank of the Kyrgyz Republic (2 tons), the Central Bank of Qatar (2 tons) and the Monetary Authority of Singapore (2 tons). Notably, Singapore was surprisingly the third largest net buyer of gold in 2023, acquiring 76.28 tonnes, thereby underlining its determination to establish a greater proportion of its total reserves in one of the safest assets in the world.
Free of counterparty risks, gold acts as a protection asset, especially during uncertain times. Its extraordinary strength in the face of economic and political attacks positions it as the global reserve asset par excellence.
Long Term Strategy
The above movements confirm the long-term strategy implemented by some countries in the world, especially those not aligned with the United States and the European Union to increase their gold reserves. Since 2010 and until the end of 2023, the five countries that have added the most gold to their financial reserves are: 1) Russia, 2) China, 3) Turkey, 4) Poland and 5) India.
Top 10 Gold Buyers since 2010, in tons, 2010-2023
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