Central Bank Buying Activity
Gold is an important part of central banks’ foreign exchange (FX) reserves. According to the International Monetary Fund (IMF), at the end of H1 2018 central banks collectively owned US$1.36tn of gold, around 10% of global FX reserves, reports the World Gold Council.
And central banks are an important part of the gold market: in H1 2018 they accounted for 10% of demand. Looking ahead, the WGC expects central bank demand to remain buoyant.
Diversification will continue to be an important driver of demand, as will the transition to a multipolar currency reserves system over the coming years.
A Solid Start to 2018
Central banks added a net total of 193.3 tonnes (t) of gold to their reserves in the first six months of 2018, an 8% increase from the 178.6t bought in the same period last year. This marks the strongest H1 for central bank gold buying since 2015.
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