The Gold market has seen robust support from increased central bank buying, countering outflows from ETFs. According to economists at ING, this demand is expected to persist as central banks continue to raise their allocations to safe assets.
China leads central bank buying
The fourth quarter saw sustained momentum in central bank demand, with an additional 229 tonnes added to global official Gold reserves, as reported by the World Gold Council. This brought the annual net demand to 1,037 tonnes, narrowly missing the record set in 2022 at 1,082 tonnes. The impetus behind this surge was driven by central banks prioritizing reserve diversification and responding to geopolitical concerns, notably led by the People’s Bank of China and the National Bank of Poland.
Amid periods of instability, Gold tends to gain allure, and its demand has experienced a surge over the past couple of years. We anticipate this trend to persist throughout the current year, driven by ongoing geopolitical tensions and the prevailing economic conditions.
