The World Gold Council's annual survey reveals that central banks have been buying an average of 1,000 tonnes of gold annually over the past four years, a significant increase from the previous decade. Nearly 90% of central banks surveyed anticipate an increase in global gold reserves over the next year, with 45% expecting their own holdings to grow.
The survey highlights a notable shift towards domestic storage, with 9% of respondents increasing their domestic gold storage in the past year, up from 5% the previous year. This trend is largely driven by concerns over geopolitical stability, particularly following Russia's invasion of Ukraine, which raised fears about the accessibility of foreign-held assets.
Giovanni Staunovo, a commodity analyst at UBS, noted that the symbolic significance of gold as a national asset further incentivizes central banks to keep reserves at home. He predicts that central banks will purchase between 750 and 1,000 metric tonnes of gold this year, which, while not likely to cause a sharp increase in prices, will provide stability to the market.
Dan Coatsworth from AJ Bell emphasized the importance of diversifying asset locations to mitigate risks, reflecting a broader strategy among central banks to reduce concentration in their holdings