Central banks around the world are currently engaged in a buying spree for gold, as indicated by the latest data from the World Gold Council (WGC). In the first quarter of this year, central banks added a staggering $24 billion worth of gold, weighing 290 tonnes, to their reserves. This level of net demand is unprecedented, surpassing all previous records since 2000.

According to the WGC, the strong demand for gold is primarily being driven by China, Turkey, India, and Kazakhstan. These countries have shown a voracious appetite for the precious metal, despite challenging conditions such as higher yields and a strong US dollar. The ongoing gold price rally seems to be further fueling their desire to accumulate gold.

The trend of central bank gold buying not only remains intact but is also predominantly dominated by banks from emerging markets. In the first quarter, ten central banks reported an increase in gold reserves of at least one tonne, all of which have been actively buying gold in recent quarters.

The previous quarterly record for net demand was set in the fourth quarter of last year, with 286 tonnes of gold being acquired. The WGC believes that more data is necessary to determine whether the recent rise in gold prices will affect future central bank purchases. However, for those central banks that actively manage their gold reserves, the WGC does not expect the price rally to derail their strategic plans for gold accumulation.

Gold prices have seen a significant increase this year, rising from around $2,000 at the beginning of the year to $2,347 at the time of publishing. It remains to be seen how this will impact central bank buying in the future.

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