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Central banks are buying gold at unprecedented rates on a global scale.

In these times of worldwide turmoil, central banks are acquiring gold at an unprecedented rate, with roughly 80 metric tons being purchased each month, equating to a value of approximately $8.5 billion at present prices.

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In these tumultuous global times, central banks worldwide are accumulating gold at an unprecedented...
In these tumultuous global times, central banks worldwide are accumulating gold at an unprecedented rate, amounting to about 80 metric tons per month, which equates to a value of approximately $8.5 billion at present prices.

Central banks are buying gold at unprecedented rates on a global scale.

Gold Rush by Central Banks: A New Era in Global Finance

In today's tumultuous world, central banks have taken an unprecedented step amidst economic uncertainty, amassing a staggering 80 metric tons of gold per month, amounting to around $8.5 billion. This gold-buying frenzy by central banks indicates a significant shift in their strategies to enhance their gold reserves.

Half of the global central banks participated in a survey by HSBC in January 2025. Over a third of them expressed their intent to increase their gold reserves in the year, with none planning to sell. This united trend towards hoarding gold underscores the pressing concern among these institutions.

Why the Gold Rush?

One major factor driving this gold rush was the freezing of Russia's foreign reserves by the US and its allies in 2022, following the invasion of Ukraine. Since then, central banks have doubled their gold purchases as they reconsider the risks of over-relying on the US dollar and the need for diversification.

Adam Lapinski, the Governor of the National Bank of Poland, succinctly explained the allure of gold: "It's not directly tied to any one country's economic policy, it withstands crises, and preserves real value over the long term." The incident highlighted the potential for the US dollar to be weaponized, with access to financial systems being subject to unilateral restrictions. In contrast, gold, stored domestically, is protected from sanctions and external meddling, making it increasingly embraced as a safer hedge against potential threats.

China: The Silent Powerhouse

China's central bank, the People's Bank of China (PBOC), is a major player in this trend. While China remains guarded about its gold purchases, it is no secret that it has been expanding its reserves. Goldman Sachs estimates that China has been procuring an average of 40 metric tons of gold per month since 2022, inferred from trade flows and ongoing gold exports from the London market to China.

The character of these imports is intriguing. In instances where gold prices in Shanghai were lower than in London, gold bars, the preferred format for central banks, continued to be imported, which defies typical commercial trading norms. This pattern suggests non-commercial, reserve-related accumulation.

Switzerland serves as a central hub for gold transfers. Over the past three years, more than 1,200 tons of central bank-grade gold flowed into the country, either stored in Swiss vaults or re-exported to undisclosed end-holders, hinting at heightened demand post-2022.

What's Next For Gold Prices?

Analysts forecast gold prices to surge in the near future. Goldman Sachs predicts gold will hit $3,700 per ounce by the end of 2025, while JPMorgan Chase envisions an even more dramatic increase, with gold potentially soaring to $6,000 per ounce by 2029.

Gold accounts for only 6% of China's reserves. By shifting a nominal percentage of their dollar-denominated foreign assets into gold, central banks could realize a significant expansion of China's gold reserves. Analysts deem a medium-term target of 20% as realistic for emerging market central banks.

The Dawn of a New Era?

The wave of record-breaking central bank gold purchases suggests a transformation in the global financial system. Central banks are reconsidering their storage of value and risk management strategies in light of concerns over dollar dependency and escalating geopolitical tensions. With gold's sanction-proof status and non-reliance on any single sovereign, it is becoming the reserve asset of choice. If this trend continues, it could drive gold prices even higher and reshape the foundations of global finance in the years to come.

  • TAGS
  • Central Banks
  • Gold
  • De-Dollarization
  • Diversification
  • Safe-haven assets
  • Geopolitical uncertainty
  • Reserves
  • Hedging
  • Inflation
  • Currency fluctuations
  • Global finance
  • Gold prices
  1. The escalating gold purchases by central banks, as indicated by the HSBC survey, reveal a strategic shift towards enhancing gold reserves in response to economic uncertainty, geopolitical tension, and the risks of over-relying on the US dollar.
  2. Central banks, including China's People's Bank of China, have increased their gold reserves significantly, leading some analysts to predict a potential expansion of these reserves to represent 20% of emerging market central banks' reserves.
  3. The surging interest in gold by central banks is driven by factors such as geopolitical uncertainty, de-dollarization, and the need for diversification following the freezing of Russia's foreign reserves in 2022.
  4. The increasing demand for gold among central banks has led to an anticipated surge in gold prices, with Goldman Sachs forecasting gold to reach $3,700 per ounce by the end of 2025, and JPMorgan Chase predicting an even more dramatic increase to $6,000 per ounce by 2029.

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