IN 2024, all that glitters is gold indeed. Central banks, who take refuge in the security and resilience of the yellow metal in turbulent times, have been hyperactively adding it to their reserves. The result: the yellow metal hit 15 all-time highs this year till mid-April on London Bullion Metal Exchange. Central banks, in fact, bought nearly one-third the total gold mined in 2023. As per World Gold Council (WGC), annual mine production last calendar year was 3,644 tonnes; of that, central banks bought 1,037 tonnes. “Most central banks are buying based on gold’s performance during crises and its role as a long-term store of value,” Juan Carlos Artigas, Head of Research, World Gold Council tells Fortune India. In 2023, top buyers included China (224.88 tonnes), followed by Poland at 130 tonnes. India was at the sixth spot with 16.22 tonnnes.
Mike McGlone, Bloomberg Senior Commodity Strategist, says the rally started with the “unlimited friendship” between Chinese President Xi Jinping and Russian President Vladmir Putin. “Led by China, the deepest pockets on the planet, central banks, are colossal buyers of gold,” he says. In 2023, they cumulatively bought 1,037 tonnes, only 45 tonnes less than 1,082 tonnes in 2022, which was the highest since the abolition of the Bretton Woods agreement in 1971. In 2020 and 2021, global central banks’ net purchases were 255 tonnes and 450 tonnes, respectively. Central banks bought 65 tonnes on a net basis in January and February 2024, according to data from International Monetary Fund (IMF) and publicly available sources.