📈Expect Strong Gold Central Bank Demand: Cable FX Macro

• Since 2010, central banks have been net purchasers of gold every year, but the pace accelerated sharply following 2022. Average annual purchases over the last four years have been around 1,000 tonnes – roughly double the average over the previous decade. This official sector demand has been one of the major structural supports for the price of gold.

• Central banks remain structurally bullish on gold. Even after several years of very strong buying and much higher gold prices, a record share of reserve managers still plan to add to their gold holdings, according to a survey compiled by the World Gold Council. Geopolitical uncertainty is a key driver. Many responses came in after the escalation of the Middle East conflict, and gold’s role as a neutral, crisis-resilient asset continues to resonate.

• The World Gold Council survey showed a very high share of central banks indicating plans to add gold to their holdings. A record high 45% of institutions plan to increase already-built gold holdings over the next 12 months.