In a resounding trend, central banks worldwide have been steadfastly increasing their gold reserves over recent years. In 2022, central bank gold purchases reached an unprecedented 1,136 tons, marking the highest level of net purchases since 1950, even surpassing the remarkable figures seen post the suspension of dollar convertibility into gold in 1971. Remarkably, this marked the 13th consecutive year of net central bank gold acquisitions.
The momentum persisted into 2023, with preliminary figures suggesting another robust year for central bank gold buying. The World Gold Council notes that this trend is likely to continue, building on the record-setting 2022.
Despite expectations that 2023 might not match the previous year’s historic volume, the strength in gold buying has exceeded projections. The World Gold Council identifies two primary drivers behind central banks’ gold acquisitions: its performance as a crisis-resistant asset and its role as a long-term store of value. Against the backdrop of geopolitical uncertainty and escalating inflation in 2023, central banks accelerated their gold purchases.
National Bank of Poland Governor Adam Glapiński emphasized the significance of gold as the “most reserve” of reserve assets, citing its ability to diversify geopolitical risk and serve as a trust anchor during times of tension. For Glapiński, holding gold is a matter of financial security and stability, ensuring resilience in the face of unfavorable circumstances.
Notable contributors to the surge in gold reserves through November 2023 include China (78 tons), Poland (56.6 tons), Turkey (39.2 tons), Uzbekistan (6.5 tons), and the Czech Republic (5.5 tons). Interestingly, Kazakhstan stands out as the only significant seller.
The list of the top 20 gold-holding countries reveals the United States, Germany, and Italy as the top three, with notable entries such as Poland, marking its debut in the top 20. Additionally, the majority of countries witnessed an increase in gold as a percentage of total reserves due to rising prices across global currencies.
The International Monetary Fund (IMF) holds an impressive 2,814.0 tons of gold, securing its hypothetical third-place ranking globally. The European Central Bank follows suit, holding 506.5 tons of gold, positioning itself 13th among countries.
In a noteworthy observation, Venezuela stands out, holding the largest percentage of total reserves in gold at 84.5%. As central banks worldwide continue to fortify their gold holdings, the precious metal remains a crucial asset amid the complex economic and geopolitical landscape.
