Central Banks Are Stockpiling Gold at Four Times the Normal Pace, Goldman Says
Goldman Sachs estimates central banks bought 79 tonnes of gold in August, with China leading the charge, as the debate shifts from how much gold to hold to where to store it amid growing concerns about reserve security.
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By Principle Post Staff·Published
A man arranging gold bars in a vault alongside storage crates · Source: Pierre Perrin—Sygma/Getty Images
Central banks are buying gold at roughly four times their pre-2022 pace, according to Goldman Sachs, which estimates purchases of 79 tonnes in August alone, compared with a historical average of about 17 tonnes a month. On a three-month seasonally adjusted basis, buying is running even hotter, at an estimated 85 tonnes a month.
China leads the buying
China accounts for a large share of the demand. The People's Bank of China bought around 25 tonnes in August and followed with roughly 23 tonnes in September, its largest monthly purchase in nearly three years and the 23rd consecutive month it has added to reserves. The sustained buying has helped fuel record Chinese gold imports even as bullion prices have cooled from recent highs.
Behind the purchases is a shift in the underlying motivation: Goldman found that about 65% of central bank respondents cited diversification as their primary reason for holding gold this year, ahead of inflation hedging, with geopolitical risk management close behind. That shift is changing the conversation from how much gold a country should hold to where it should keep it — reflecting what the bank describes as broader concerns around reserve security and cross-border trust. France's central bank, the Banque de France, has already acted on that concern, pulling about 129 tonnes, or 5% of its total gold holdings, out of storage in New York.
