Insights

Despite a general belief that Sovereign Wealth Funds (SWFs) do not invest in gold, our engagement with these institutions in recent years has increasingly shown that many SWFs do incorporate gold in their portfolios for diversification, capital preservation, and other factors.

Our Director of Central Banks and Public Policy, Kurtulus Taskale Diamondopoulos, joins Pierre Ortlieb, economist at OMFIF, to discuss central bank gold reserves management amid the coronavirus pandemic.

Central bank net purchases totalled 39.8t in May, in line with net purchases in March and April, and above the monthly average of 35t over the first four months of this year.

Our central banks team, in partnership with Yougov, recently concluded the 2020 Central Bank Gold Reserves Survey. This year’s survey, which saw a jump in the number of responses, shows strong signs of an increase in gold’s relevance for central bank reserve management.

In April, central banks bought another 31.6t based on IMF data. While the monthly increase is not far off the 6-month average (34.7t), it is 24% lower than March and 35% lower than April 2019.

In February, central banks bought a net 36 tonnes (t) of gold, almost a third higher than January’s net purchases, but 52% lower y-o-y. This brings y-t-d net purchases to 64.5t, 44% lower than the 116.1t of net purchases over the first two months of 2019.

Wishful thinking. That’s how Angel Gurría, secretary general of the Organisation for Economic Co-operation and Development (OECD), responded to any prospect of a swift economic recovery from the coronavirus pandemic. But the scale of the impact on the global economy – as well as our daily lives – has been matched by the scale of the financial response.

Today we’ve published our latest central bank gold data, which now includes buying and selling activity for January 2020.

In November, central banks reported adding 27.9 tonnes – on a net basis – to global official gold reserves, 43% lower than October’s increase. On a year-to-date basis, this brings cumulative net purchases to 570.2t, 11% higher the same period in 2018 (515.2t).

Our latest central bank data is now available on Goldhub and makes for interesting reading. Looking at the latest statistics on gold, monthly increases (of a tonne or greater) in gold reserves have begun to ease over the past three months. In October, reported net purchases totalled a healthy 41.8t, but this was 16% lower than September (49.6t), which itself was 16% lower than August (59t).

Today we have published our latest central bank data for August. As usual, I’ll be summarising the key highlights. But if you want to dig a little deeper, you can find our central bank data set here.

Over the past 18 months, central banks have had a voracious appetite for gold. Alongside the impressive AUM growth in gold-backed ETFs, this has been one of the most prominent stories in the gold market. As we noted in the most recent edition of Gold Demand Trends, in H1 2019 central bank demand hit the highest level since becoming net buyers in 2010.

On Friday afternoon, the European Central Bank announced that its 20-year old Central Bank Gold Agreement was no longer necessary, while confirming that: “Gold remains an important element of monetary reserves” – we couldn’t agree more.

Intro: Central banks bought more gold in 2018 than at any time since the early 1970s – and the trend has continued this year. Isabelle Strauss-Kahn, Member of the Advisory Board of the World Gold Council, former Director of Market Operations at the Banque de France and former Lead Financial Officer at the World Bank, explains why.

Our Central Banks and Public Policy team have just published the results of the 2019 Central Bank Gold Reserves Survey. The survey gives a fascinating insight into the minds of central bankers and is especially timely since central banks continue to post record-breaking levs of net gold purchases in recent quarters.

As we do every month, we have now published our widely watched central bank statistics. These figures give a clear view of central bank activity and how gold reserves are evolving.