Record gold purchases by central banks in H1 2023

In 2022, gold purchases by central banks worldwide reached their highest level since 2011 with a year-on-year increase of 18 per cent. This trend initially continued in the first half of 2023, and set a new record – central banks have not expanded their gold reserves as strongly as this year since the World Gold Council began publishing the gold reserve purchases or sales of central banks worldwide in 2000.

387 tonnes of new gold reserves in the vaults of central banks

The purchasing policy of the central banks with regard to their gold reserves varied greatly internationally in the first half of 2023. The Chinese central bank was by far the biggest buyer with an increase of 103 tonnes, followed by Singapore with 73 tonnes and Poland with 48 tonnes. While the Polish central bank's buying motive is certainly also a response to the difficult geopolitical situation in Europe, China in particular is continuing its efforts to become less dependent on the world currency and second largest foreign currency reserve, the US dollar.

Net purchases in only three out of six months

The Turkish central bank, of all places, which had been one of the biggest buyers of gold in recent years due to the extremely high inflation in Turkey (47.8 percent at the last count), parted with a total of 132 tonnes of gold reserves in March, April and May. According to analysts from the World Gold Council, the reasons for this were the strong domestic demand for gold as well as the national restriction on gold imports. The central bank gold was therefore sold primarily on the domestic market. In June, however, the Turkish central bank returned to net purchasing with 11.3 tonnes of gold. Whether the central banks' gold purchases will remain at record levels in the second half of the year remains to be seen. Many experts are rather sceptical, as demand in the second quarter of 2023 had decreased by 35 per cent compared to the same period last year.