Global central banks reported net sales of 27t in May, less than half the net sales seen in April. Excluding Türkiye’s sales, the trend in central bank buying is still in place.
Central bank gold reserves declined by 71 tonnes in April, primarily due to Turkish selling. Despite this, we expect central banks to remain net buyers in 2023, supported by their overall positive sentiment towards gold reserves.
According to the IMF, reported global central bank gold reserves remained virtually unchanged in March. Available data shows purchases almost perfectly offset sales, resulting in a net increase of 0.2 tonnes.
Central bank gold buying momentum showed no signs of stalling in February. Reported global gold reserves rose by 52t during the month – the eleventh consecutive month of net purchases – following January's 74t. 1 This excludes updated data for Russia (more on that below), but still maintains the upward trend (based on the 12-month moving average) since June 2022.
Record central bank gold buying last year shone a spotlight on the past, present and future of gold as a reserve asset. There are compelling reasons to expect continued buying from this sector
Intensifying expectations of a less-hawkish US Fed bode well for international gold prices during the last month of 2022. While the SHAUPM in RMB rose 1% in December, the LBMA Gold Price AM in USD capped a 3% gain.
Central banks continue to accumulate gold according to the latest data available. In October – data is lagged by two months – central banks added a further net 31t of gold to international reserves (-41% m-o-m).
The domestic gold price diverged from the international gold price: the MCX Gold Spot price rose marginally by 0.2% compared to a 2% decline in the LBMA Gold Price AM in USD
Gold’s price divergence continued: the Shanghai Gold Price Benchmark PM (SHAUPM) in RMB rose by 1%, while the LBMA Gold Price AM in USD saw a 2% fall in October.
UK financial markets have gone into full-blown crisis in the last few weeks. The government’s ‘mini-budget’ announcement on the 23rd September was poorly received by global investors, leading to a sharp spike in UK government bond volatility.
Gold plays an important role in the management of reserve assets, being one of the few assets that are widely approved under the investment guidelines used by the world's central banks.
Many of the investors we talk to feel that gold’s performance should be much stronger considering multi-decade high inflation across the world
Central bank demand remained robust in July. Global gold reserves increased by 37t (net), below June’s 64t increase. Added to the 270 of net purchases over H1, this pushes YTD central bank demand towards the 300t mark.
