Central bank net purchases totalled 463t in 2021. This marks a significant rebound in demand from this sector following the decade low of 255t in 2020. Buying was heavily front-loaded: 324t was bought during the first half of the year, boosted by several large purchases, before slowing sharply to 139t in the second half. Q4 2021 saw net purchases of 48t – the lowest quarterly level of net buying since Q3 2010.
Central Banks and other institutions
28 January, 2022
Central bank buying rebounded and developed markets re-joined the fray
- Central banks added 463t to global gold reserves in 2021, 82% higher than 2020
- This pushed global gold reserves to just under 35,600t, their highest for almost 30 years
- Developed market central banks were also among the notable buyers.
| Tonnes | 2020 | 2021 | YoY | |
|---|---|---|---|---|
| Central banks & others | 255.0 | 463.1 |  |
82% |
Source: Metals Focus, World Gold Council
2021 is the twelfth consecutive year of net purchases, during which time central banks have bought a net total of 5,692t. According to data from the IMF, global central bank gold reserves rose to just shy of 35,600t during 2021, the highest level since 1992.1
In a continuation of the established trend, a large number of emerging market central banks bought gold, demonstrating the breadth of interest.2 Many of the 15 central banks that bought a tonne or more over the year were familiar names, having added to their gold reserves recently. India, for example, added a further 77t to its gold reserves in 2021, the biggest increase since 2009 when it bought 200t from the IMF. Hungary added 63t over the year, tripling its gold reserves, while Uzbekistan and Kazakhstan added 30t and 15t respectively. But we also saw several new emerging market banks significantly increase their gold holdings. Thailand, which last increased its gold reserves in 2017, was the largest buyer in 2021. The country’s gold reserves rose by 90t (59%) to 244t, accounting for 6% of total reserves and the highest tonnage level on record.3 Brazil bought 62t between May and July, the first sizeable increase since November 2012; this took its gold reserves to 130t (2% of total reserves), the highest level since November 1999.4
But in a departure from the trend, buying was not just confined to emerging markets. For the first time in almost a decade we saw significant buying from developed market central banks. In Q2, the Monetary Authority of Singapore (MAS) added just over 26t to its gold holdings. This is the first increase for at least 21 years – when data availability begins – lifting gold reserves to 154t (2% of total reserves). A spokesperson for MAS stated: “The change in gold holdings is a result of the continuous and ongoing efforts by MAS to ensure that the Official Foreign Reserves portfolio remains well-diversified and resilient through economic and market conditions,”. Meanwhile, Ireland became the first Western developed market central bank to meaningfully increase its gold reserves. It added 3t in 2021 (+47%), the first rise in its gold holdings since a 0.5t addition in 2008. While other developed market central banks have increased their gold reserves in recent years, this has typically been at a much slower pace. For example, Greece has increased its gold reserves by over 2t but over a period of ten years.5
Selling activity was more concentrated by comparison: six central banks reduced their gold reserves by a tonne or more. The largest sale – of 31t – came from the Philippines, lowering gold holdings to 158t (8% of total reserves). This is the largest annual sale from a central bank since 2016, when Venezuela sold 86t. In September 2020 the central bank shifted to more actively trading gold to maintain its gold reserves at a more “optimal” level of around 10% of total reserves. Kyrgyz Republic (7t), Sri Lanka (~4t), Germany (3t), and the UAE (2t) were the other notable sellers during the year. Sri Lanka’s sale represented around half of its gold reserves and was done to help bolster the liquidity of its foreign reserves, which hit a 12-year low in November. However, the door was left open to future gold purchases when foreign reserves have increased. The sale from Germany was likely related to its long-standing coin-minting programme.
The broad range of buying in 2021 has shown there is still significant appetite for gold as a reserve asset. While demand from central banks can, at times, be less predictable than other sources of gold demand – given it is often policy rather than market driven – we remain confident that the overall trend of net buying will continue into 2022. Many of the factors for gold ownership highlighted in our 2021 Central Bank Gold Reserves Survey are likely to remain relevant, given continued uncertainty over the economic outlook.6 For more information on our expectations for central bank demand in 2022, please see review and outlook section.
Footnotes
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Data to November 2021.
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Country-level gross sales and purchases based on the most recent IMF IFS and respective central bank data available at time of writing. This may not match the net central bank demand figures published in this report as Metals Focus uses various sources of information to obtain their estimates.
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As per the IMF IFS database back to December 1950.
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As of 31 December 2021.
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More details on this can be found in our monthly central bank gold statistics.
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Our 2022 Central Bank Gold Reserves Survey findings will be published later in the year.
