According to Kitco News, China purchased 23 tons of gold in October. But China is not the only country to buy gold.
As the Federal Reserve maintains a tightening trend towards its monetary policy, central bank gold demand continues to define the precious metal market, providing key support and withstanding considerable resistance. Last week, the World Gold Council raised its expectations for central banks' gold purchases to be close to record levels this year, approaching or possibly exceeding last year's record levels. Analysts point out that China continues to dominate the gold market.
Krishan GoPaul, an analyst at the World Gold Council, reported on social media that China purchased an additional 23 tons of gold in October, citing the latest data from the People's Bank of China. This is the 12th consecutive month that China has purchased gold. According to reports, the current total gold reserves are 2215 tons, 204 tons higher than at the beginning of the year, "GoPaul said in a comment.
Although China continues to lead central banks in overall demand, it is not the only central bank to increase gold reserves.
Last week, the World Gold Council stated that central banks purchased 337 tons of gold in the third quarter, the third strongest quarter on record.
The purchasing power has exceeded our expectations to some extent. Although we believe that central banks will continue to be net buyers in 2022, we believe it is unlikely to be comparable to last year's record buying volume. If purchases continue to be strong in the fourth quarter, the total annual amount may be closer than we expected, "analysts said in the report. Our view is based on our survey results and a broad purchasing base, indicating that increasing gold allocation is becoming a recognized prudent strategy across the entire segmented market
So far this year, central banks around the world have purchased 800 tons of gold, an increase of 14% compared to last year.
Although gold demand has been strong so far this year, the market still has a long way to go before reaching an unprecedented record of over 1135 tons last year.
Juan Carlos Artigas, Global Research Director of the World Gold Council (WGC), stated in an interview with Kitco News that central bank demand highlights the diversified role of gold in investment portfolios. He said, "Gold is a comprehensive asset that can play a crucial role in investment portfolios by providing long-term returns, diversification (especially when needed), and providing liquidity
Analysts say it is not surprising that central banks around the world continue to purchase gold, as they are shifting from the US dollar to diversification.
In a recent interview with Kitco News, Robert Minter, Director of Investment Strategy at abrdn ETF, stated that the government's growing debt and deficit are the growing liabilities of the US dollar. He added that the US dollar is unlikely to lose its position as a world reserve currency, but countries will continue to diversify their foreign exchange reserves.
