Gold prices have been on a rollercoaster ride in recent months, with the price per ounce reaching a peak of $1,950 against the US dollar on January 31, 2023, before dropping back down to $1,857.50 at the time of writing.
Despite the volatility, a recent report by the World Gold Council (WGC) suggests that central banks around the world are continuing to buy gold at a steady pace.
The report, titled “No Dry January for Central Bank Gold Buying”, highlights that central banks added a net 31 tonnes of gold to global reserves in January 2023, representing a 16% month-on-month increase.
Turkey, China, and Kazakhstan were among the most active buyers, with the Central Bank of Turkey acquiring 23 tonnes of gold during the month.
The report also notes that while central banks are likely to continue purchasing gold throughout the rest of 2023, they may not match the record-breaking levels seen in 2022.
The WGC author, Krishan Gopaul, stresses that it is reasonable to expect that demand may struggle to reach the same levels as last year.
In addition to the regular buyers, the European Central Bank (ECB) acquired two tonnes of gold in January due to Croatia joining the eurozone and having to transfer its reserve assets to the ECB.
Meanwhile, the Central Bank of Uzbekistan sold 12 tonnes of gold during the same period.
The data used in the report is based on International Monetary Fund (IMF) records, and the WGC notes that some of the data may be revised in future monthly reports.
Despite the uncertain outlook for gold prices and demand, the WGC report suggests that central banks will continue to see the value of gold as a strategic asset for their reserves in the coming years.