Central banks are preparing for a record increase in gold reserves: a new signal for the market
Global financial regulators are demonstrating an unprecedented level of optimism regarding precious metals. According to the latest survey data from the World Gold Council, which included 74 central banks, 45% of them plan to actively increase their gold purchases over the next 12 months. This figure is a record high in the history of observations, eloquently signaling a shift in priorities in global reserve policy.
The share of central banks intending to replenish their gold reserves has more than doubled compared to 2020. The current level of 45% marks the third consecutive annual increase, forming a sustained long-term trend rather than a temporary spike in interest. Analysts note that regulators prefer to actively buy gold during price dips, using any correction as an opportunity for advantageous entry.
Record Demand from Emerging Economies
Unsurprisingly, emerging economies are leading this large-scale movement. Among them, the share planning purchases has risen from 48% last year to approximately 53% this year. This shift in demand clearly reflects their desire for high-quality reserve diversification and a significant reduction in dependence on traditional currency assets, primarily the US dollar.
In total, 89% of central banks expect a near-term increase in global gold reserves over the next 12 months. This forecast is the second-highest result in the history of such surveys. The combination of record plans and near-universal expectations of growth paints a picture of strong bullish sentiment, providing fundamental support to the market.
Notably, regulators view current price levels as an excellent opportunity for entry rather than a reason for excessive caution. In my opinion, this is a powerful signal for the market: central banks, with insider knowledge of macroeconomic risks, are voting for gold as the primary safe-haven asset, and this trend is unlikely to change in the coming years.