(Mike Maharrey, Money Metals News Service) After surging to the highest levels of 2024 in October, central bank gold buying continued in earnest in November.
Based on the latest data collected by the World Gold Council, central banks added a net 53 tonnes of gold to their holdings in November. That pushed official central bank gold buying to 807 tonnes for the year after a record third quarter.
A World Gold Council analyst said the continued increase of central bank gold reserves in November “extends a broader trend” we saw throughout 2024, “driven by the need for a stable and secure asset amid global economic uncertainties.”
It is likely central banks have added even more unreported gold. For instance, the People’s Bank of China quietly purchased over 100 tonnes of gold in October and November.
Speaking of the Chinese central bank, it publicly returned to the table after a 6-month pause with a 5-ton increase to its official gold reserves. China was the biggest central bank gold buyer in 2023 but stopped announcing increases to its reserves in May.
Poland was the biggest buyer in November, increasing its gold reserves by another 21 tonnes. The National Bank of Poland now holds almost 18 percent of its reserves in gold.
Earlier this year, National Bank of Poland Governor Adam Glapiński indicated the central bank plans to increase its gold holdings to 20 percent of its reserves.
“This makes Poland a more credible country, we have a better standing in all ratings, we are a very serious partner, and we will continue to buy gold.”
With December data still to come, Poland ranks as the biggest gold buyer of 2024, having added 90 tonnes to its reserves.
Uzbekistan reported a 9-ton increase in its reserves. It was the first purchase by the Uzbek central bank since July.
It is not uncommon for banks that buy from domestic production – such as Uzbekistan and Kazakhstan – to switch between buying and selling.
Kazakhstan flipped from selling to buying in October and added another 5 tonnes of gold to its stockpile in November.
India continued to increase its gold holding with an 8-ton purchase. Through November, the Reserve Bank of India had added 73 tonnes of gold to its reserves.
An Indian economist told the Times of India that the push to accumulate gold was based on both political and economic reasons. He said that the “reliability” of the U.S. dollar has “diminished.” He noted the “noticeable decline” in the confidence in U.S. dollar assets.
Another economist told the Times, “It makes a lot of sense (to invest in gold), given the increased volatility in the FX market, elevated interest rates in the U.S., and, of course, also as the central banks in each economy would like to diversify the asset classes in which they are parking their reserves.”
India recently transported 100 tonnes of its gold from the UK back into India.
Several other countries reported increases in their gold reserves in November.
- Jordan – 4 tonnes
- Turkey – 3 tonnes
- Czech Republic – 2 tonnes
- Ghana – 1 tonne
Singapore was the biggest seller in November, decreasing its gold holdings by 5 tonnes.
The Bank of Finland also reported a 10 percent decrease in its gold reserves. According to a statement by the bank, “Exchange rate risk is the most significant of the Bank of Finland’s financial asset risks. Increasing the size of its foreign exchange reserves elevates the Bank’s exchange rate risk considerably, and so the Bank is strengthening its foreign exchange rate provision by selling about 10% of its gold reserves.”
With only December data left to compile, central banks are on track for their 15th straight year of increasing gold reserves.
Last year, central bank gold buying fell just 45 tons short of 2022’s multi-decade record.
According to the World Gold Council, central banks net gold purchases totaled 1,037 tons in 2023. It was the second straight year central banks added more than 1,000 tons to their total reserves.
Central bank gold buying in 2023 built on the prior record year. Total central bank gold buying in 2022 came in at 1,136 tons. It was the highest level of net purchases on record dating back to 1950, including since the suspension of dollar convertibility into gold in 1971.
China was the biggest buyer in 2023.
Analysts at ANZ Bank recently said they expect central bank gold buying to remain hot for at least the next six years.
According to these analysts, “Depleted trust in the U.S. fixed-income assets and the rise of non-reserve currencies are other themes that could support central bank gold buying.”
Mike Maharrey is a journalist and market analyst for MoneyMetals.com with over a decade of experience in precious metals. He holds a BS in accounting from the University of Kentucky and a BA in journalism from the University of South Florida.
