Gold prices are skyrocketing and central banks around the world are continuously increasing gold holdings in their reserves. During the recent few months the central bank of China, among all the central banks in the world, has emerged as the biggest buyer of gold. World Gold Council figures show, that during last November, after 37 months, China’s central bank started buying gold for its foreign exchange reserves. And since then till March, it has bought 120 tonnes of gold. Total gold reserve with China’s central bank has increased to 2,068 tonnes.
Although the gold purchase of central banks is not limited to the central bank of China. Rather most of the central banks of the world are buying gold… During January and February this year, the total purchase of central banks was recorded at 126 tonnes and the central bank of China had a major share in this. Even before 2023, in 2022, central banks around the world had increased the purchase of gold for their foreign exchange reserves. Central banks had purchased a record 1,136 tonnes of gold which is 152% more than the purchase in 2021. In the last in 55 years, this is the biggest purchase by central banks ..
India’s central bank, the Reserve Bank of India has also contributed in the purchase of gold by central banks around the world. During 2022, the Reserve Bank had purchased more than 33 tonnes of gold for its foreign exchange reserves. And this process of purchase continues in 2023 as well. Last March, RBI has purchased about 3.5 tonnes of gold and the total gold reserve crossed 794 tonnes which is the ninth largest gold reserve of the world’s central banks.
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Commodity expert Sugandha Sachdev believes that the process of buying gold by most of the central banks globally, including the Reserve Bank of India, may continue even further. And due to their purchase, gold prices may see a rise in future.
Actually because of the Russia-Ukraine war, the whole world is facing inflation. This has led to economic uncertainty in the global economy. In the fight against inflation, central banks around the world are making loans expensive. Due to this, the economic challenges have increased even more and a banking crisis has arisen at the global level. Recently three big banks of USA fell prey to this crisis. To avoid this growing economic uncertainty at the global level and currency fluctuations, central banks all over the world are seeing gold as a safe option. This is the reason why central banks are increasing their gold purchase.
