Central Banks’ Gold-Buying Spree Reaches 50-Year High

The comments below are an edited and abridged synopsis of an article by Tyler Durden

Gold is poised to close out January with a fourth straight monthly gain after the Fed’s uber-dovish flip-flop seemed to signal that it’s done raising interest rates (reportedly for a while).

Central Banks’ Gold-Buying Spree Reaches 50-Year High | BullionBuzz

This has hurt the US dollar, helping gold to its sixth January gain in a row, as investors sought a haven against slowing growth and US-China trade disputes.

Bloomberg survey results showed a decidedly positive bias on the precious metal; still, there’s no guarantee gold will keep appreciating at the same pace.

And as BCS Global Markets said in a note, the big range in analysts’ outlook for gold this year shows that there is no consensus.

However, there is one group of global investors who are waving in those bullion trucks with both hands: the world’s central banks.

Last year, central banks bought the most gold in 47 years, with 651.5 tonnes (74% higher YoY). This is the highest level of annual net purchases since the suspension of dollar convertibility into gold in 1971.

Additionally, the 2018 gold buying spree by central banks isn’t just the biggest in 47 years, but also the second highest annual total on record (only surpassed by 1967, when central bank gold reserves increased by 1,404 tonnes).

So, what do the central banks know that mom-and-pop FAANG buyers don’t?

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