The world’s Central banks are buying up gold
2023.01.31 03:07
The world’s Central banks are buying up gold
By Kristina Sobol
Budrigannews.com – The World Gold Council (WGC) reported on Tuesday that in 2022, central banks added a whopping 1,136 tonnes of gold worth approximately $70 billion to their holdings, which was by far the most since 1967.
Since the 1990s and 2000s, when central banks, particularly those in Western Europe that own a lot of bullion, sold hundreds of tonnes annually, the data demonstrate a shift in attitudes toward gold.
European banks have stopped selling since the 2008-09 financial crisis, and a growing number of emerging economies like Russia, Turkey, and India have bought.
Gold is favored by central banks because, in contrast to currencies and bonds, it does not depend on any issuer or government, so it is expected to maintain its value during turbulent times.
Gold also makes it possible for central banks to diversify away from assets like the dollar and U.S. treasuries.
Krishan Gopaul, an analyst with the World Gold Council, stated, “This is a continuation of a trend.”
He stated:
“Those drivers are clearly contributing to the events of the previous year. “You had a lot of uncertainty and volatility on the macroeconomic and geopolitical fronts.”
The WGC reports that central banks purchased 862 tonnes between July and December 2022, despite a dip in purchasing during the coronavirus pandemic.
Turkey, China, Egypt, and Qatari banks all claimed to have purchased gold in the previous year. The WGC stated, however, that approximately two-thirds of the gold purchased by central banks last year was not reported publicly.
China’s and Russia’s banks are two examples of those that have not consistently provided information about changes in their gold holdings.
The WGC stated, “Central bank buying (in 2023) is unlikely to match 2022 levels.”
“The capacity to increase allocations may be limited by lower total reserves. However, due to some central banks’ tardy reporting, we must place a high degree of uncertainty on our expectations, primarily for the upside.”
The global demand for gold increased to 4,741 tonnes last year as a result of central bank purchases, up 18% from 2021 and the highest level since 2011.
