Alexander Savenkov In the wake of worldwide turbulence, the third quarter of 2023 has seen central banks globally continue their robust gold acquisition, aggregating to 337 metric tons, as per the latest report by the World Gold Council (WGC). This persistent trend of purchases points to a robust and continuous demand for gold, potentially setting the stage for a strong closing total for 2023.
Global Central Banks Amplify Gold Reserves Amid Economic Uncertainties
With the accumulation of 337 metric tons of gold, central banks approached but did not exceed the peak purchase volume witnessed in the third quarter of the previous year. Nonetheless, this has propelled the total acquisitions for the year to a historic zenith of 800 metric tons. The WGC interprets these purchase patterns as an indicator of enduring demand for the precious metal, hinting at the possibility of concluding 2023 on a strong note.
On the financial front, the price of gold per ounce recently peaked at $2,002, although it has retreated slightly beneath the $2,000 threshold. The last month has seen gold appreciate over 9% in value relative to the U.S. dollar, marking a 22% increase within the annual scope. The WGC report underscores the central banks’ role as a significant contributor to this upward demand trajectory.
Excluding the figures from over-the-counter (OTC) dealings, the WGC report indicates that gold demand in the quarter surpassed the five-year average by 8%, despite registering a 6% dip from the previous year, totaling 1,147 metric tons. When accounting for OTC trades and stock movements, the total demand for gold observed a 6% incline year-on-year, amounting to 1,267 metric tons.
According to the report, the demand for gold as an investment surged to 157 metric tons in Q3, marking a significant 56% increase from the prior year, although falling below the five-year average of 315 metric tons. The global gold ETFs noted a reduction by 139 metric tons during the quarter, a significant figure but still less than the 244-ton reduction witnessed in the same quarter of the preceding year.
Louise Street, a senior market analyst at the World Gold Council, encapsulated the current gold market scenario, noting that despite the headwinds posed by elevated interest rates and a robust U.S. dollar, gold demand has shown remarkable resilience this year. The quarter’s performance, as she highlighted, remains robust when juxtaposed with the five-year average.
From October 2023 onwards, amid heightening geopolitical tensions, particularly in Israel, the valuation of precious metals along with bitcoin (BTC) has seen an uptick as economic uncertainties have intensified. Over the recent month, there has been a 9.4% increase in gold prices, while BTC has experienced a notable 25% surge. The week concluded with U.S. stock markets demonstrating buoyancy, finishing with strength as Treasury yields saw a pullback and all principal indices closed Friday on a high note.
We invite your insights and analysis on the central bank’s gold demand for the third quarter of 2023. Kindly share your perspectives on this matter in the comment section below.
Table Of Contents
Frequently Asked Questions (FAQs) about central bank gold demand
How much gold did central banks purchase in Q3 of 2023?
Central banks worldwide purchased a total of 337 metric tons of gold in the third quarter of 2023, according to the World Gold Council report.
Did the Q3 2023 gold purchases by central banks set a new record?
No, the purchases in Q3 2023 came close to but did not surpass the record set in the third quarter of 2022.
What has been the trend in the price of gold over the last year?
The price of gold has seen a 22% increase over the past 12 months, with a notable rise of over 9% against the U.S. dollar in the last 30 days alone.
How does the gold demand in Q3 2023 compare with the five-year average?
Gold demand in the third quarter of 2023 exceeded its five-year average by 8%, despite a 6% decrease from the previous year when excluding over-the-counter transactions.
What is the significance of central banks’ gold purchases according to the World Gold Council?
The World Gold Council notes that central bank purchases are a key driver of gold demand, with consistent buying patterns indicating ongoing demand for the precious metal.
How has gold investment demand changed in Q3 2023 compared to the previous year?
Gold investment demand in Q3 2023 increased by 56% from the previous year, reaching 157 metric tons, although it was below the five-year average.
More about central bank gold demand
- World Gold Council Q3 Report
- Gold Price Trends
- Central Bank Gold Reserves
- Economic Impact of Gold Investments
- Gold ETF Market Dynamics
5 comments
with all the chaos in the markets right now I’d say even bitcoin might not be a bad place to park some cash, gold’s not the only game in town
honestly I’m not surprised gold has always been a safe haven during times like these, central banks know what’s up
there’s a typo in the third para, it says “precius” instead of “precious”, got to keep an eye out for those details folks.
interesting numbers but what about the impact of all this on the smaller investors? seems like the big players always get the safe bets
wow didnt know central banks were buying so much gold right now does anyone think this will keep going up?