Why is central bank gold buying at 55-year highs? gold demand centralbanks
Central banks had their eyes on gold last year, purchasing 1,136 tonnes — the most since 1967, according to the World Gold Council . This also marked the second-highest level on record going back to 1950 and was a more than 150% increase from last year.
Central banks are paying attention to gold because of how it performs during times of crisis and its role as a long-term store of value."It's hardly surprising then that in a year scarred by geopolitical uncertainty and rampant inflation, central banks opted to continue adding gold to their coffers and at an accelerated pace," the report pointed out.
Most of the 1,136 tonnes total was once again"unreported," said the report."Echoing Q3, data for the final quarter of the year was again a combination of reported purchases and a substantial estimate for unreported buying," the report highlighted.The Central Bank of Turkey bought the most gold out of all central banks in 2022 as it searched for protection against unchecked inflation.
"These announcements were significant given China's historic position as a large buyer of gold, having accumulated 1,448 tonnes between 2002 and 2019," the report added. India bought 33 tonnes in 2022, which was 57% lower than the previous year."Intervention in the FX market to support the rupee during the year caused a decline in FX reserves of US$70bn, which may have impacted the bank's gold buying. Its gold reserves now stand at 787t ," the WGC report noted.
Germany sold four tonnes because of its ongoing coin-minting programme. Sri Lanka reduced its holdings by three tonnes, followed by Poland, the Philippines, and Mongolia, each selling two tonnes. Other sellers of at least one tonne were Bosnia and Herzegovina, Cambodia, and Bhutan.
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