Central Banks Purchase $24 Billion Worth of Gold in Three Months, Establishing a New Record: Report
Central banks worldwide are currently engaged in a frenzy of purchasing gold, as revealed by the latest data from the World Gold Council (WGC). In the first quarter of this year, central banks added a staggering $24 billion worth of gold, weighing a total of 290 tonnes, to their reserves. This level of net demand is the highest ever recorded for a single quarter since data collection began in 2000.
According to the WGC, the primary driving forces behind this surge in demand for the precious metal are China, Turkey, India, and Kazakhstan. These countries have exhibited a voracious appetite for gold, despite the challenging conditions such as higher yields and the strength of the US dollar. The sustained buying spree by central banks from emerging markets has not only maintained the longstanding trend of increasing gold reserves but has also set a high bar for the past two years.
Ten central banks, all of which have been actively acquiring gold over recent quarters, reported increased gold reserves of a tonne or more during Q1. The previous record for net demand in a quarter was set in Q4 of last year, with a total of 286 tonnes.
The WGC acknowledges that more data is required to determine whether the recent price surge in gold will affect central bank purchases in the future. However, for those central banks that actively manage their gold reserves, the organization does not anticipate any disruption to their strategic plans for accumulating gold, despite potential impacts on trade execution.
The price of gold has witnessed a significant rise this year, starting at around $2,000 and currently standing at $2,347 at the time of publication.
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