Central banks load up on gold

The World Gold Council's (WGC) latest Gold Demand Trends report paints a mixed picture. On one hand overall gold demand in the first quarter of 2023 was down 13% (excluding over-the-counter, OTC) compared to the same period last year, but including OTC then total demand was up 1% compared to the same quarter in 2022. On the other hand central banks continued buying gold at a fast rate, acquiring 228 tonnes, the highest rate of purchases in a first quarter since 2000. The Monetary Authority of Singapore (MAS) was the biggest single buyer, adding 69 tonnes to its reserves, closely followed by the People's Bank of China, which added 58 tonnes.

Chinese consumers are said to have bought 198 tonnes of gold jewelry in the quarter, 41% of the global total. The high and volatile gold price appears to have deterred gold buying in India, where quarterly demand was the weakest in three years. Demand in Europe was disappointing and in Germany fell by 73%, which the WGC attributed to the rise in the Euro-denominated gold price, which triggered profit-taking among investors.