Central Bank Gold Buying Remains Firm, Driven by Safe-Haven Demand

IMF IFS Statistics Reveal Global Gold Reserves by Country

Despite economic uncertainty and geopolitical tensions, central banks and supranational organizations continue to increase their gold reserves. According to the International Monetary Fund's (IMF) International Financial Statistics (IFS) database, central banks purchased 180 tons of gold in the second quarter of 2023, bringing total net purchases in the first half of the year to 270 tons.

The latest central bank gold survey highlights two primary drivers behind this trend: safe-haven demand and diversification of foreign exchange reserves. In times of increased economic volatility, gold is often considered a safe investment due to its historical stability and ability to hedge against inflation. Additionally, central banks are seeking to diversify their foreign exchange holdings to reduce risk and increase returns.

The long-standing trend in central bank gold buying remains firmly intact, with demand for the precious metal rising by 28% this year. This is primarily driven by a flight towards safer assets amid ongoing geopolitical uncertainty, high inflation, and rising interest rates.

Globally, central banks and supranational organizations now hold approximately 35,000 tons of gold, representing about 18% of global official foreign exchange reserves. The United States remains the largest holder of gold reserves, with over 8,000 tons, followed by Germany, Italy, France, and Russia.