Central banks and other institutions

8 November, 2016

An additional 82t in the third quarter brought central banks net purchases to 23 consecutive quarters.

Tonnes Q3'15 Q3'16 YoY
Central banks and others 169.0 81.7 -51%

So far in 2016, we have seen characteristic restraint from central banks

Although institutional investors have flocked to gold in the face of significant uncertainty, net purchases from central banks have been more measured. Year-to-date, central banks have purchased 271.1t, lagging the 407.7t for the same period in 2015. Nonetheless, gold remains a significant – and gradually rising – part of total central bank reserves, currently accounting for more than 13%.

In the third quarter, central bank net purchases fell 56% year-on-year to 81.7t, from 168t. Activity bore a striking resemblance to recent quarters: the central banks that have been consistently active in the market in recent months remained so, while little movement was seen elsewhere. Russia (43.9t), China (15.2t) and Kazakhstan (10t) continued to push forward with their buying programmes and Belarus also added 3.1t to their reserves. Net sales from other banks were again limited.

The case for gold remains compelling for reserve managers amid the prevalence of negative interest rate policies and diversification away from the US dollar

Yet, like retail consumers, many central banks may be adopting a “wait-and-see” approach, in the hope they can bolster their gold reserves on possible dips in the price, or until they are confident gold has regained some upward momentum.

But there is good reason to believe that purchases are unlikely to dry up any time soon. Having already accumulated 128.1t by the end of September, the Central Bank of Russia recently made known its aim to purchase around 200t in total this year, similar to the 206t it purchased in 2015.1 It has also been reported that Belarus intends to increase its gold and FX reserves by US$500mn in 2017.2 Furthermore, a recent survey of 19 central bank reserve managers showed that close to 90% plan to either increase or maintain their current gold reserve levels over the next three years (Chart 10).3



Chart 10: Central banks show intention to maintain or increase gold reserves

GDT Q3 2016 Central banks - Chart 10: Central banks show intention to maintain or increase gold reserves

Source: World Gold Council

Data as of


  1. In response to the question “What is your institution’s plan for your gold holdings over the next three years?”: 56% said increase, 33% said no change, and 11% said decrease. This survey was conducted at our Executive Programme in Gold Reserves Management at the University of Cambridge Judge Business School in September 2016.

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