Central Banks Worldwide Buy 16 Tons of Gold in March 2024

Central banks worldwide, led by Turkey, India, and China,bought 16 tonsof gold in March 2024, marking a significant increase in global gold demand and confidence in the metal as a store of value. The Reserve Bank of India's (RBI) gold holdings reached a record high of 822.1 tons, as the bank continued to diversify its foreign exchange reserves.

Why this matters: The increased gold purchases by central banks indicate a growing lack of confidence in traditional currencies and a shift towards safer assets, which could have significant implications for the global economy. This trend may also lead to increased gold prices and a reevaluation of investment strategies by individual investors.

The Central Bank of Turkey added the most gold during the month, with 14 tons, while the People's Bank of China was also a major buyer. Buying strength has continued into 2024, with emerging market banks being the main driving force for both purchases and sales. Monthly gross purchases remained steady at 40 tons, partly offset by gross sales of 25 tons, indicating healthy demand for gold.

India's forex reserveshit an all-time high of $648.562 billion during the week ended April 5, following multiple weeks of increases. However, the forex reserves dropped $2.412 billion to $637.922 billion during the seven days ended April 26, according to RBI data. Amit Goel, co-founder and chief global strategist at Pace 360, stated:"In late April, India's foreign exchange holdings declined by $2.41 billion, mostly due to the downward revaluation of gold and foreign currency assets. Gold reserves decreased by $1.28 billion, while foreign currency assets dropped by $1.16 billion."

Sanjeev Agrawal, president of PHD Chamber of Commerce and Industry, commented: "Amid the geopolitical challenges and uncertain global economic climate, India's foreign currency reserves stand intact at $637 billion bolstered by strong economic growth trajectory, attractiveness to international investors and robust export growth trajectory."

The increase in gold purchases by central banks reflects their growing confidence in the metal as a store of value amidst global economic uncertainty. With the RBI's gold holdings reaching a record high and emerging market banks driving demand, the trend of central bank gold buying is expected to continue in the coming months.

Key Takeaways

• Central banks bought 16 tons of gold in March 2024, led by Turkey, India, and China.
• RBI's gold holdings reached a record high of 822.1 tons, diversifying foreign exchange reserves.
• Increased gold purchases indicate a lack of confidence in traditional currencies and a shift to safer assets.
• Emerging market banks drive demand, with monthly gross purchases steady at 40 tons.
• India's forex reserves hit an all-time high of $648.562 billion, despite a recent $2.412 billion drop.