Central banks around the world continued to bolster their gold reserves in March, reflecting ongoing concerns over economic stability and geopolitical tensions.
The latest data from the World Gold Council revealed that global central banks collectively increased their gold holdings by 16 tons during the month. This net increase was driven by significant purchases amounting to 40 tons, which were partially offset by sales totaling 25 tons.
In March, the Central Bank of Turkey emerged as the largest buyer, adding 14 tons of gold to its reserves. This move coincides with Turkey’s efforts to combat high price inflation, which reached a staggering 69.8% on an annual basis in April. Notably, Turkey had been a net seller of gold in 2023 but resumed purchasing in the third quarter of that year.
Similarly, the Reserve Bank of India expanded its gold holdings by 5 tons in March, continuing its steady accumulation since 2017. Indian economists cited political and economic motives for this trend, including diminished confidence in the U.S. dollar and increased volatility in the foreign exchange market.
China also bolstered its official gold reserves by 5 tons, marking the 17th consecutive month of accumulation. Despite officially reporting 2,262 tons of gold, analysts speculate that China may possess significantly more gold “off the books” through entities like the State Administration for Foreign Exchange (SAFE).
Other central banks that increased their gold reserves in March include Singapore (4 tons), Russia (3 tons), Poland (1 ton), Czech Republic (1 ton), and Kyrgyz Republic (1 ton).
Conversely, Uzbekistan and Jordan reduced their gold holdings by 11 tons and 4 tons, respectively. These fluctuations are common among banks heavily reliant on domestic gold production.
The World Gold Council anticipates strong central bank demand for gold to persist throughout 2024, citing ongoing global uncertainty and the erosion of trust in U.S. fixed-income assets. Analysts at ANZ Bank share this sentiment, projecting sustained interest in gold as a crisis response tool, diversification asset, and store of value among central banks worldwide.
