Krishan Gopaul

In this Pensions Age article, Krishan Gopaul explores the question; two-thirds of pension funds are deeply concerned about the future of the global economic and financial system: How might gold help?

Central bank net purchases totalled 39.8t in May, in line with net purchases in March and April, and above the monthly average of 35t over the first four months of this year.

In April, central banks bought another 31.6t based on IMF data. While the monthly increase is not far off the 6-month average (34.7t), it is 24% lower than March and 35% lower than April 2019.

In February, central banks bought a net 36 tonnes (t) of gold, almost a third higher than January’s net purchases, but 52% lower y-o-y. This brings y-t-d net purchases to 64.5t, 44% lower than the 116.1t of net purchases over the first two months of 2019.

Wishful thinking. That’s how Angel Gurría, secretary general of the Organisation for Economic Co-operation and Development (OECD), responded to any prospect of a swift economic recovery from the coronavirus pandemic. But the scale of the impact on the global economy – as well as our daily lives – has been matched by the scale of the financial response.

Today we’ve published our latest central bank gold data, which now includes buying and selling activity for January 2020.

At the end of January, the new head of the European Central Bank (ECB), Christine Lagarde, announced the launch of a year-long strategic review of the bank’s monetary policy strategy. Stemming from this, there has been much discussion recently about the ECB’s existing “below but close to 2%” inflation target, and whether this needs to be made more specific, both in aim and measurement. 

In November, central banks reported adding 27.9 tonnes – on a net basis – to global official gold reserves, 43% lower than October’s increase. On a year-to-date basis, this brings cumulative net purchases to 570.2t, 11% higher the same period in 2018 (515.2t).

Our latest central bank data is now available on Goldhub and makes for interesting reading. Looking at the latest statistics on gold, monthly increases (of a tonne or greater) in gold reserves have begun to ease over the past three months. In October, reported net purchases totalled a healthy 41.8t, but this was 16% lower than September (49.6t), which itself was 16% lower than August (59t).

Yesterday, the International Monetary Fund released their updated World Economic Outlook. And, if investors were looking for any seeds of optimism, may I suggest reading The Art of Happiness by the Dalai Lama instead?

Today we have published our latest central bank data for August. As usual, I’ll be summarising the key highlights. But if you want to dig a little deeper, you can find our central bank data set here.

While the gold market is a complex place, full of interesting dynamics and uses, nothing quite gets people's attention like the gold price.

Over the past 18 months, central banks have had a voracious appetite for gold. Alongside the impressive AUM growth in gold-backed ETFs, this has been one of the most prominent stories in the gold market. As we noted in the most recent edition of Gold Demand Trends, in H1 2019 central bank demand hit the highest level since becoming net buyers in 2010.

The inhabitants of the UK are surrounded. There’s no escape. Brexit is everywhere you turn. News broadcasts, front pages, dinner conversations, everywhere.  Over three years (and counting) since the result, Brexit uncertainty remains a persistent part of the UK way of life and at the forefront of investors’ minds.