Central Banks To Add More Gold In Next 12 Months: World Gold Council Report

Central bank sentiment towards gold continues to be very high, with 29 per cent saying they want to add more gold in the coming 12 months, according to a recent survey by the World Gold Council (WGC). In its ‘2024 Central Bank Gold Reserves Survey Results’ the council stated that the official sector gold reserves are set to grow during this period (next 12 months) banking on high optimism towards gold futures. “Central banks around the globe have been significant buyers of gold in recent years amid both economic and geopolitical uncertainty,” the report states.

WGC’s survey received responses from a record-high 70 central banks, the results show.

The key findings of the survey are:

• 29% Central Banks say they will buy more gold in the next 12 months

• 81% say official sector gold reserves will grow

• 69% say gold’s share of reserves will be higher

The WGC report finds that the Central Banks continue to keep a ‘very high’ sentiment towards gold. Around 29 per cent say that they will add more gold in the next 12 months while 81 per cent believe that the official sector gold reserves overall will increase in the same period. Last year, central banks added 1,037 tonnes of gold – the second highest annual purchase in history – following a record high of 1,082 tonnes in 2022.

WGC has noted that optimism towards gold’s future role in global reserves continues to grow wherein 69 per cent of Central Banks say that the gold’s share of reserves will be higher in five years against 62 per cent last year.

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Banking on better Performance during crisis

Central banks continue to hold gold due to the ‘long-term store of value’ of this precious metal, the WGC states. The banks also base their trust upon gold’s performance during times of crisis. 

“There has been a notable uptick in how advanced economy central banks view the role of gold, with their perspectives now much more closely aligned with those of emerging market central banks,” the WGC states.

Top concerns of central banks when it comes to reserve management decisions

• Interest rate levels

• Inflation concerns

• Geopolitical instability

India’s gold demand witnessed a significant rise of 8 per cent, reaching 136.6 tonnes in the first quarter of 2024 (January to March). This rise in demand was fuelled by the Reserve Bank of India's (RBI) robust gold purchases. In addition to this, the high in the first quarter was furthered by robust economic growth, despite gold prices reaching historic highs. 

The RBI had purchased over 19 tonnes of gold during the first quarter of 2024 (Q1-CY24 / Q4-FY24), thereby surpassing the 16 tonnes it purchased throughout the entirety of last year (2023), according to the WGC report released in April.