According to the World Gold Council (WGC), central banks around the world bought 399 tons of gold in the 2022 quarter. Specifically, valued at around $20 billion, which helped drive global demand for the metal.
“Demand in the year to September recovered to pre-pandemic levels.”
According to the WGC, central bank purchases in the third quarter brought their purchases for the year to September to 673 tons, more than the total purchases in a full year since 1967.
«World central bank purchases increased to almost 400 tons in the third quarter (September quarter). This is the largest quarter of demand from this sector in our records since 2000».
If anything, gold is generally considered a safe asset in times of uncertainty or turmoil. But, many financial investors sell shares in gold-backed ETFs as interest rates rise and returns on other assets rise. However, support has come from other areas, such as retail buyers in Asia and central banks.
Also read: Is it interesting to invest in gold?
Who are the mystery shoppers responsible for the central bank gold boom?
At the moment, among the big buyers are the central banks of Turkey, Uzbekistan, Qatar, and India. For example, purchases of gold bars and coins also rose in Turkey to 46.8 tonnes in the quarter, up more than 300% year-on-year, as people buy gold to hedge against inflation.
WGC analyst Louise Street said: “Going forward, we anticipate central bank purchases and retail investors to remain strong. We also expect jewelry demand to continue to perform strongly in areas such as India and Southeast Asia.”
By the way, according to Bloomberg, not all countries report their gold purchases regularly, including major ones like China and Russia.
«Not all official institutions publicly report their gold holdings, or they may do so late. We cannot rule out further unreported purchases.”
Likewise, Bloomberg states: “ A large part of the purchases that have helped push the central bank’s gold purchases this year to the highest level since 1967 come from still unknown players ”.
I close with this phrase from Michael Caine: «The problem with gold is the effect it causes. People go crazy ».