Banks Made Biggest Purchase of Gold Since 1967

Kyra Gardner
Kyra Gardner Business Economy
3 Min Read

Last year, central banks added 1,136 tons of gold to their reserves, worth an impressive $70 billion – the greatest figure since 1967, according to the World Gold Council (WGC). This illustrates a major shift in attitude towards gold as compared to the 1990s and 2000s when western European nations sold hundreds of tonnes each year. However, after the 2008-2009’s financial crisis had passed, these same nations stopped selling, and numerous emerging markets such as India, Turkey, and Russia began acquiring much more bullion than before.

Gold Is Bought By Central Banks Because It Is A Versatile Asset

Central banks favor gold as they can trust it to maintain its worth in turbulent times, and no single party or government is accountable for the asset. Additionally, central banks can diversify away from U.S. Treasuries and other currencies by investing in gold. According to World Gold Council analyst Krishan Gopaul: “This is a continuation of a trend.”

Last year saw significant geopolitical and macroeconomic uncertainty, which directly contributed to a dip in gold buying during the coronavirus pandemic. However, purchasing activity picked up after July 2022, with central banks acquiring 862 tons between July and December, according to the World Gold Council (WGC). Several countries, such as Turkey, China, Egypt, and Qatar, all shared that they had bought gold last year, yet more than two-thirds of their purchases went undisclosed by WGC figures.

China and Russia are two prominent countries that have yet to publicly provide updates on their respective gold reserves.

gold is bought by central banks because it is a versatile asset

Purchases in 2023 May Not Be As Much As Last Year

The World Gold Council (WGC) recently declared that central bank buying in 2023 will unlikely equal the levels seen in 2022 due to lower total reserves. Yet, lagging accounts from certain institutions hint at a possible upside surprise, making it essential for us to apply an abundant degree of uncertainty when drawing our expectations.

Last year, record-breaking gold demand surged to 4,741 tonnes worldwide due to central bank purchases – an astonishing 18% increase from 2021 and the highest since 2011.

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Kyra, an international journalist with a passion for economics and technology. She has worked for several top media outlets, including Financial Times, covering global finance and emerging tech trends. Kyra has reported on a wide range of topics, from the impact of artificial intelligence on job markets to the economic implications of climate change. Her in-depth analysis and insightful reporting have won her numerous awards and accolades. Kyra's curiosity and desire to understand complex economic and technological issues make her a respected and sought-after journalist in her field. As a skilled media coach and public speaker, Gardner also has experience in strategic planning and management.
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