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.
Annual gold production rank in 2022 was unchanged y/y amongst the five largest gold producing nations, with China still the world's largest gold producer. Extending this to the top 20 countries, things look very different compared to 2010. But, more broadly, global gold mine production remains geographically diverse.
Gold prices failed to extend the momentum of the previous month. Factors such as a strong dollar and rising yields weighed on the USD gold price in the month. But due to a 3% depreciation in the local currency against the dollar, the SHAUPM in RMB strengthened.
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.
The 2023 “Shunto” sent positive signals to Japanese employees regarding possible pay increases amid a backdrop of elevated inflation in the region. Shunto – the wage negotiations between major corporations and unions that take place every March – provides pay level guidance for all Japanese employers, large and small.
In 2022, average all-in sustaining costs (AISC) in the gold mining industry reached a record high, rising by 18% y/y to $1,276/oz. This was 14%, or US$160/oz, above the previous record set in 2012.
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
