Visualizing 30 Years of Central Bank Gold Demand
The comments below are an edited and abridged synopsis of an article by Tyler Durden
Nearly one-fifth of all the gold ever mined is held by central banks. In 2022, central banks snapped up gold at the fastest pace since 1967.
The record gold purchases of 2022 are in stark contrast to the 1990s and early 2000s, when central banks were net sellers of gold. An infographic shows 30 years of central bank gold demand.
Central banks’ attitude toward gold started changing following the 1997 Asian financial crisis and then later, the 2007–08 financial crisis. Since 2010, central banks have been net buyers of gold on an annual basis.
The top 10 official buyers of gold between end-1999 and end-2021 represent 84% of all the gold bought by central banks during this period.
Russia and China, America’s top geopolitical rivals, have been the largest gold buyers over the last two decades. Russia accelerated its gold purchases after being hit by Western sanctions following the annexation of Crimea in 2014.
Interestingly, the majority of gold-buying nations are emerging economies. These countries have likely been stockpiling gold to hedge against financial and geopolitical risks affecting currencies, primarily the US dollar.
Meanwhile, European nations (France, Switzerland, the UK, the Netherlands) were the largest sellers of gold between 1999 and 2021.
In 2022, central banks bought a record 1,136 tonnes of gold, worth around $70 billion. Türkiye, dealing with 86% year-over-year inflation in 2022, was the largest buyer at 148 tonnes. China added 62 tonnes in November and December, amid rising geopolitical tensions with the US.
Two-thirds, or 741 tonnes, of official gold purchases were unreported in 2022. These are likely to have come from countries like China and Russia, who are looking to de-dollarize global trade to circumvent Western sanctions.