Central banks expect official sector demand to rise in the next year despite high gold prices

Press release

Central banks expect official sector demand to rise in the next year despite high gold prices

Bangkok, 20 June 2024 – More than four in five respondents to a central bank survey have indicated that they expect reserve managers will continue to increase their gold holdings in the next 12 months, according to new data released by the World Gold Council today1. This is the highest ever recorded since the annual survey began.

The 2024 Central Banks Gold Reserves (CBGR) survey, which collected data from a record 70 of the world’s central banks, also finds that nearly 30% of central banks plan to add to their own gold reserves within the next year. This favourable view of gold from reserve managers persists despite two successive years of record central bank purchasing² and the gold price hitting new all-time highs in 2024.

According to the report, reserve managers indicate that they are looking to gold to help mitigate risks and prepare for further political and economic uncertainty, globally. Although seven in ten still view gold’s legacy as a reason to hold it (71%), other reasons have surpassed it this year. The top three reasons to hold gold now include gold’s long-term value (88%), performance during a crisis (82%), and its role as an effective portfolio diversifier (76%).

Central banks in emerging market and development economies (EMDE) maintained their positive outlook for gold’s future share in reserves portfolios. Notably, they were joined by advanced economy central banks which now view gold more positively: More than half (57%) of this group said gold would account for a higher proportion of reserves five years from now, a significant increase compared to 2023 (when 38% of respondents indicated the same view)³. Advanced economy central banks have also become more pessimistic in their outlook for the US dollar’s share of global reserves, a view which has consistently been more prominent among EDMEs. More than half (56%) of advanced economy respondents believe the US dollar’s share of global reserves will fall (up 10 percentage points year-on-year), while 64% of EMDE respondents share the same view.

Shaokai Fan, Global Head of Central Banks & Head of Asia-Pacific, commented: “Extraordinary market pressure, unprecedented economic uncertainty and political upheavals around the world have kept gold front of mind for central banks. Many of these institutions have become more aware of the asset’s value as a way to manage risks and diversify their portfolios. What has been remarkable is that despite record demand from the official sector in the last two years coupled with climbing gold prices, many reserve managers still maintain their enthusiasm for gold. While influences like price may temporarily slow down purchases in the near term, the broader trend remains in place, as managers recognise gold’s role as a strategic asset in the face of ongoing uncertainty.”

To read the full report visit goldhub.org

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Notes to editors:

1 The research was conducted by the World Gold Council in partnership with YouGov between 19 February and 30 April 2024 with a total of 70 responses from central banks around the world. This is an increase in sample size from the previous year, which was a record high at the time with 59 responses.

² In 2023, central banks added 1,037 tonnes of gold – the second highest annual purchase in history – following a record high of 1,082 tonnes in 2022.

³ The question posed to survey respondents was: Q8: Gold accounted for 16% of total reported reserves (foreign exchange and gold) in Q3 2023. What proportion of total reserves (foreign exchange and gold) do you think will be denominated in gold 5 years from now?

For further information please contact:

Maetavarin Maneekulpan, TQPR Thailand, T: 02 260 5820 E: mae@tqpr.com

Note to editors

World Gold Council

We are a membership organisation that champions the role gold plays as a strategic asset, shaping the future of a responsible and accessible gold supply chain. Our team of experts builds understanding of the use case and possibilities of gold through trusted research, analysis, commentary, and insights. We drive industry progress, shaping policy and setting the standards for a perpetual and sustainable gold market.

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