Central Bank Gold Purchases Hit New Record in 2022

The central banks in emerging countries are still relatively under-allocated, even after sizable additions in recent years, WGC observed.

SEATTLE (Scrap Monster): The central bank gold purchases witnessed a record-breaking year in 2022, said the World Gold Council (WGC). Also, the trade body anticipates continued gold buying in this sector, primarily led by emerging market countries. It must be noted that central bank gold purchases had totalled around 1,136 tonnes during the previous year.

According to Louise Street, Senior Markets Analyst at WGC, the extended period of net buying that kicked off in 2010 is unlikely to give way to significant net sales. On the contrary, the WGC expects central banks around the world to further build their official gold holdings, she added.

The central banks in emerging countries are still relatively under-allocated, even after sizable additions in recent years, WGC observed. The IMF data suggests that collective allocation to gold by emerging countries is still below 10%.

Today’s gold market is deeper and more liquid. Moreover, it is structurally different from that of 1960s. Also, the evident shift away from over-reliance on the US dollar as a reserve currency will result in central banks injecting more resources into gold buying activities. Under the current circumstances, gold looks attractive upon comparison with other reserve assets, WGC said.

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