Central banks increase gold reserves in growing diversification move

 

 


China, as noted by analysts, is on a gold buying spree, but it is not the only central bank active in this market. Central banks worldwide have been increasing gold reserves to diversify away from the US dollar and hedge against looming economic challenges.

Bullionbound.com reports that China’s gold reserves have surged to 2,113.5 tons as of August 2024. This marks a 237 per cent increase from a decade ago.

Data from the World Gold Council indicates that central banks increased gold purchases to 337t over the third quarter of the year with the buying banks led by China, Poland, Turkey and India

Consequently the price of gold hit never before seen highs of $2865/Oz due to central bank buying

News Source Forbes in a 2025 publication noted, “Central banks stormed into the gold market in the final three months of last year, playing a key role in the metal (which doubles as a currency) hitting an all-time high today of $2865 an ounce, up 3.7 per cent in a week and 41 per cent over the past 12-months.

“The World Gold Council (WGC), an industry lobby group, said overall gold demand last year reached an annual record of 4974.5 metric tons, up one per cent on total demand in 2023 of 4945.7t.”

Forbes notes how Central banks and private investors dominated the gold market in all of 2024 “seeing the metal as a defense against inflation and as an asset class separate from government-controlled currencies.”

In 2024 gold reached record highs in the second quarter, driven by a combination of continued central bank buying, strong OTC investment and an upturn in Western ETF inflows later in the quarter.

Forbes concludes, “gold continues to be viewed favourably by central banks as a reserve asset. According to the 2024 Central Bank Gold Reserves (CBGR) survey, which was conducted between 19 February and 30 April 2024 with a total of 70 responses, 29 per cent of central banks respondents intend to increase their gold reserves in the next twelve months.”

Photo credit: aurimentum.de

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