{"id":11471,"date":"2022-12-08T17:28:12","date_gmt":"2022-12-08T15:28:12","guid":{"rendered":"https:\/\/www.liberalglobe.com\/?p=11471"},"modified":"2022-12-08T17:28:18","modified_gmt":"2022-12-08T15:28:18","slug":"central-banks-start-buying-more-gold","status":"publish","type":"post","link":"https:\/\/www.liberalglobe.com\/?p=11471","title":{"rendered":"Central Banks start buying more Gold"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">According to data compiled by the World Gold Council, central banks worldwide added another 31 tonnes of gold to official reserves in October.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Total central bank gold holdings are now at their highest level since 1974.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Central Bank of the UAE was the biggest buyer of gold in October. It added just over 9 tonnes to its gold reserves. So far this year, the UAE has increased its stockpiles by 18 tonnes.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Turkey also bought about 9 tons of gold in October. The Central Bank of Turkey has been the biggest buyer of gold in 2022, adding 103 tonnes to its reserves so far.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Uzbekistan is also adding gold to its reserves on a steady basis. It also increased its stocks by 9 tonnes in October. It was the seventh straight month of gold purchases for the nation. This brings ytd net purchases to 37 tonnes despite starting the year selling almost 25 tonnes in the first quarter. Gold reserves account for just over 60% of Uzbekistan&#8217;s total reserves.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The National Bank of Kazakhstan added 3 tonnes to its official gold reserves in October. This reduces its net sales to 18 tonnes this year.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It is not unusual for banks that buy from domestic production \u2013 such as Uzbekistan and Kazakhstan \u2013 to switch between buying and selling.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Qatar added 1 ton of gold to its stockpiles.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Updated IMF data shows that the National Bank of Cambodia bought a net 2 tonnes of gold in late September. The purchases were made between July and September, bringing the country&#8217;s total gold reserves to 52 tonnes.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The lack of gold purchases from India in August was notable. India has been buying gold consistently for months. India now owns 781 tonnes of gold, ranking it as the ninth largest gold holding country in the world. Since markets resumed in late 2017, the Reserve Bank of India has bought over 200 tonnes of gold. In August 2020, there were reports that the RBI was considering increasing its gold reserves significantly.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">These numbers reflect officially reported gold purchases, but there were large unreported increases in gold stocks in the third quarter. Central banks that often fail to report purchases include China and Russia. China is the mystery buyer stockpiling gold to minimize exposure to the dollar.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">There has always been speculation that China owns far more gold than it officially discloses. China is alleged to hold several thousand tonnes of gold &#8220;off the books&#8221; in a separate entity called the State Administration of Foreign Exchange (SAFE).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Why do central banks buy gold?<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Gold has a critical advantage: unlike bonds, it doesn&#8217;t bind you to an unreliable counterparty. In a world where you can&#8217;t trust anyone, it makes sense to insure yourself with metal.<\/li>\n\n\n\n<li>Gold&#8217;s performance in a crisis and its role as a long-term store of value\/inflation hedge are key determinants of central banks&#8217; decisions to hold it.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>The course of gold purchases<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Central banks added nearly 400 tonnes of gold in the third quarter, according to data compiled by the World Gold Council.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That was 300% higher than in the third quarter of 2021 and appeared to be the largest quarterly increase in central bank gold holdings since the World Gold Council began keeping records in 2000.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Including mystery purchases, central banks globally added 393.3 tonnes of gold (net) in the third quarter alone. With the October purchases, the total for 2022 is about 704 tonnes. That&#8217;s higher than any annual increase in gold purchases by the central bank since 1967, with two months to go.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Central banks added 463 tonnes of gold to global reserves in 2021. This was 82% higher than in 2020.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Last year was the 12th consecutive year of net purchases. During this time, central banks bought a net total of 5,692 tonnes of gold.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">After record years in 2018 and 2019, central bank gold buying slowed in 2020 with net purchases totaling around 273 tonnes. The lower rate of purchases in 2020 was expected given the strength of purchases by central banks in both 2018 and 2019. The economic chaos caused by the coronavirus pandemic has also affected the market.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Central bank demand (FED) stood at 650.3 tonnes in 2019. This was the second highest level of annual purchases in 50 years, just below 2018&#8217;s net purchases of 656.2 tonnes. According to the WGC, 2018 marked the highest level of annual net central bank gold purchases since the dollar&#8217;s convertibility to gold was suspended in 1971 and the second highest annual total on record.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>According to data compiled by the World Gold Council, central banks worldwide added another 31 tonnes of gold to official reserves in October. Total&#8230;<\/p>\n","protected":false},"author":1,"featured_media":11472,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[859,5,860],"tags":[875,240,242,1596,3942],"class_list":["post-11471","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economics","category-economic","category-fiscal-economics","tag-banks","tag-central-banks","tag-gold","tag-gold-price","tag-gold-purchases"],"_links":{"self":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts\/11471","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11471"}],"version-history":[{"count":1,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts\/11471\/revisions"}],"predecessor-version":[{"id":11473,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts\/11471\/revisions\/11473"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/media\/11472"}],"wp:attachment":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11471"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11471"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11471"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}