Gold Demand Trends Full Year 2023

Central bank demand, a key driver of gold in recent years, maintained its momentum in Q4 as a further 229t was added to global official gold reserves. This lifted annual (net) demand to 1,037t, just short of the record set in 2022 of 1,082t. Global official sector gold reserves are now estimated to total 36,700t.

Two successive years of over 1,000t of buying is testament to the recent strength in central bank demand for gold. Central banks have been consistent net buyers on an annual basis since 2010, accumulating over 7,800t in that time, of which more than a quarter was bought in the last two years. Findings from our 2022 and 2023 Central Bank Gold Survey show that gold’s performance during times of crisis and its role as a long term store of value are key reasons for central banks to hold gold.

As well as extending the buying trend to 14 consecutive years, the breadth of reported buying among central banks remained healthy in 2023. The vast majority of purchases continued to come from emerging market central banks, many of whom have been regular buyers in recent years.

The People’s Bank of China (PBoC) regained the crown for the largest single gold buyer; as it reported a total rise of 225t in its gold reserves over the year. This makes 2023 the country’s highest single year of reported additions since at least 1977.² As a result, PBoC gold reserves now stand at 2,235t, although this still represents only 4% of China’s vast international reserves.

The National Bank of Poland was the second largest buyer in 2023. Between April and November, the central bank bought 130t of gold, increasing its gold holdings by 57%, to 359t. As with the PBoC, this was the highest level of annual buying from the NBP on record³  and exceeded the previously stated target of 100t.⁴  In October, NBP President, Adam Glapiński, indicated that he would like to see gold accounting for 20% of Poland’s international reserves (gold’s current share is 12%).⁵

Buying beyond these two banks was relatively modest by comparison, but no less important. The Monetary Authority of Singapore was once again the sole developed market buyer, adding a further 77t to its gold reserves, lifting them to 230t. The Central Bank of Libya added to its gold reserves for the first time since 1998/9, buying 30t in June; its gold reserves now total 147t. The Czech National Bank’s purchase of 19t of gold was its highest annual addition on record back to 1993; the Czech Republic’s gold reserves now stand at 31t. 

The Reserve Bank of India and the Central Bank of Iraq were among the other banks that added a tonne or more to their reserves. The European Central Bank also saw its gold reserves rise by almost 2t in January, but this was a transfer of gold from Croatia as the country joined the eurozone.

Reported gross purchases were so strong that they comfortably outweighed higher gross sales in 2023. The National Bank of Kazakhstan (47t, as of November) and the Central Bank of Uzbekistan (25t) were the two largest sellers of gold. Both banks buy gold domestically – as both nations are significant gold producers – and actively manage a portion of their substantial official gold reserves. Therefore the swings between buying and selling we have seen in recent years are not wholly surprising. In statements to Bloomberg in July, the National Bank of Kazakhstan was clear that its aim is to cut gold’s share of its international reserves to 50-55% (from 58% in November, the latest data available).⁶

The Central Bank of Bolivia reported that its gold holdings fell by 18t between May and August (latest data available). This followed the passing of a bill in May, which allowed for the monetisation of official gold reserves.⁷ This 43% decline in official gold reserves since end-April leaves gold holdings totalling just over 24 tonnes. According to reports, the central bank must keep a minimum of 22 tonnes of gold reserves.⁸

The Central Bank of Turkey was also a net seller in 2023 – but only just.⁹ Having sold 159t between March and May to help satisfy very strong domestic demand during a temporary partial ban on gold bullion imports,¹⁰ official gold reserves finished the year just 2t lower than at the end of 2022. A resumption in strategic buying since May has helped official gold reserves recover to 540t.

Looking ahead into 2024, making predictions for this sector is as challenging as ever. But the buying trend that has been in place since 2010 shows little sign of abating, even if a third consecutive year of ~1,000t net purchases may be unlikely. This reinforces our belief that global central banks will remain net buyers again this year. For more on this, please see the Outlook section.