Central banks bought a record amount of gold in the first quarter

Central banks increased gold reserves by 228 tons in the first three months of 2023, which was a record for the first quarter since the beginning of collecting such statistics in 2000, the World Gold Council (WGC) reported. The volume of purchases exceeds the previous record of the first quarter, set in 2013, by 34%.

1

► Read the “Ministry of Finance” page on Facebook: главные финансовые новости

Buying gold

Purchases by central banks remain stable and significant, which emphasizes the role of gold in their portfolios during periods of market volatility and increased risk, the WGC review says.

The WGC’s quarterly report on trends in the gold market showed that demand for exchange-traded gold in the first quarter decreased by 13% compared to the same period last year. However, overall demand grew by 1%, supported by the recovery of off-market demand.

Read: Gold, bucks and euros: how speculators will make money on fear

Who bought the most?

The Monetary Authority of Singapore (MAS) became the largest buyer of the precious metal in the past quarter, the WGC reported. MAS replenished its gold reserves by 69 tons of gold. Now they are 45% more than at the end of 2022.

The People’s Bank of China bought 58 tons during the quarter. Now it holds 2,068 tons of gold in its reserves, which is 4% of the total volume of registered gold reserves in the world.

The Central Bank of Turkey also became a major buyer, which increased its reserves by 30 tons.

The Central Bank of India added 7 tons of gold to its reserves, increasing the gold reserve to 795 tons.

Notable purchases were also noted from the Czech Republic (2 tons) and the Philippines (1 ton).

What analysts say

“Against the backdrop of a shaken banking sector, ongoing geopolitical tensions and a difficult economic situation, the role of gold as a safe-haven asset comes to the fore,” said Louise Street, senior market analyst at WGC.

In this situation, it is quite likely that the investment demand for gold will grow this year, especially in combination with the weakening of the restraining factors – the strong US dollar and the increase in interest rates, the expert believes.

The WGC noted a notable surge in investment demand for gold in March following the collapse of Silicon Valley Bank, the first major failure in the US banking system among regional lenders this year, CNBC’s Louise Street said.

The demand for gold ETFs remained in the second quarter until the beginning of May, and the looming threat of recession in developed markets may cause an acceleration of the inflow of funds into such funds this year, the WGC expert predicts.

Central bank purchases are likely to remain high and support high demand throughout 2023, even if they are less than the record highs seen last year, Louise Street believes.

Conference “Invest Talk Summit” Find out how to make money on investments in 2023-2024! Details on the website.

Promo code for a 10% discount: minfin10.

🕵️ We created a small survey to learn more about our readers.

💛💙Your answers will help us become the best, pay more attention to topics that are interesting to you. 🤗 We will be grateful if you find a minute to answer our questions.

Author: Editor of the news feed Yaroslav Holoborodko Writes on the topics: Macroeconomics, stock market, cryptocurrency

Source: Ministry of Finance

Views: 16