Eric Sepanek
SBC Founder
Eric Sepanek is the founder of Scottsdale Bullion & Coin, established in 2011. With extensive experience in the precious metals industry, he is dedicated to educating Americans on the wealth preservation power of gold and silver.
Central bank gold buying reached a record 483 tons in the first half of 2024, extending highs reached in 2022 and 2023. This milestone comes despite a slight dip in demand throughout the second quarter (Q2) largely due to China’s pause following 18 consecutive months of gold binging. Experts are predicting robust gold demand for the remainder of the year and beyond.
The Numbers
- Central banks bought 483 tons of physical gold in H1 of 2024.
- Gold accounts for 6% of total reserves, up from 3.2% in 2022.
- Gold demand reached highs of over 1,000 tons in 2022 and 2023.
- Gold prices sit close to a record of $2,506 per ounce.
Why Investors Should Care
As the largest and wealthiest investors, central banks have a massive influence on the gold market. Their buying and selling habits impact product availability, price action, and price stability for all investors. Savvy investors watch the investment moves of governments to inform their own trading decisions.
Market Impact
Central banks have boosted their gold holdings across the board in the first half of 2024 even as Chinese demand — the largest buyer in prior years — cooled off. Gold prices have notched several new highs throughout the first half of the year due to steady and growing central bank gold demand. This boom in gold purchases also impacts asset availability. In fact, the WGC has warned that gold is getting harder to find as supplies wane and demand escalates.
Expert Insights
Based on these numbers, The World Gold Council (WGC) concludes that “central banks will remain significant net purchasers throughout 2024.”
The group highlights the 2024 Central Bank Gold Reserves Survey which looked into the specific motivations behind government-level gold buying.
“Respondents indicated that [gold’s] role as a long-term store of value, performance during times of crisis, effectiveness as a portfolio diversifier, and lack of default risk remain key to [its] allure.”
John Karow, Precious Metals Advisor at Scottsdale Bullion & Coin, reveals the disconnect between what policy leaders do and say.
“[Central banks] are buying a lot of gold despite their constant drumbeat support of fiat currency. They’re either planning something or just reacting to what’s going on in the world economy.”
Future Outlook
The WGC expects central bank gold demand to continue throughout 2024, hinting at further economic and geopolitical deterioration. The transition to gold is bolstered by the global process of de-dollarization as countries seek independence from the waning dollar in favor of gold. Altogether, these factors suggest higher prices. Several experts have already increased their gold price predictions.
What’s Driving the News?
The WGC keeps close tabs on what central banks own gold and global purchase trends as these investors comprise the majority of gold demand. Experts have been paying close attention as of late to see if the post-pandemic gold rush continues. This recent report proves that the governmental shift into physical gold from fiat currency remains strong.
Actionable Takeaways
Watch Central Banks
Central banks are the most well-funded, experienced, and knowledgeable investors on the planet. Watching their moves can tell everyday investors a lot about broader market conditions, precious metals demand, and future price action.
Consider Physical Gold
There’s a reason central banks focus on physical over paper gold. It’s because tangible precious metals offer inherent value, physical ownership, and privacy protection which their counterparts lack. Investors seeking these advantages should consider physical gold such as bullion and numismatic coins.
Talk to an Advisor
Gold has a proven track record of keeping pace with inflation, making it a reliable hedge against market downturns. However, gold assets are most effective when aligned with your goals, budget, and personal preferences. Talking to an advisor can help you find the best solution for your financial needs.
Interested in Gold Investing?
Get personalized investing advice from our precious metals advisors. Contact us today by calling toll-free at 1-888-812-9892 or using our live chat function.