Table Of Content
Gold Demand Hits New Record in 2024
According to the World Gold Council, total global gold demand reached 4,974 tonnes in 2024, setting a new annual record.
This was driven primarily by strong central bank purchases and a resurgence in investment demand.
Key highlights:
Central Banks: Net purchases exceeded 1,000 tonnes for the third year in a row, with a sharp acceleration in Q4 alone (333t), reflecting ongoing de-dollarization and demand for safe-haven assets.
Investment Demand: Reached a four-year high of 1,180t, up 25% year-over-year. Notably, gold ETFs stabilized after three years of outflows.
Bar and Coin Demand: Remained steady at 1,186t, although bar demand increased while coin demand declined.
Overall, both official sector demand and private investors played key roles in lifting gold demand to historic highs in 2024.
Why Do Central Banks Buy Gold? Key Trend Reasons
Central banks are loading up on gold more than ever — here’s why this timeless asset remains essential in global reserves.
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Inflation Hedge and Store of Value
With global inflation surging post-pandemic and remaining sticky in many economies, central banks view gold as a long-term store of value.
Unlike fiat currencies, gold isn’t eroded by inflation or interest rate cycles, making it attractive during periods of economic uncertainty.
Even in 2024, with inflation easing in the U.S., concerns persist in regions like the Middle East, Latin America, and parts of Asia — prompting banks to hold more gold as insurance.
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Diversification Away From the U.S. Dollar
Central banks are increasingly looking to reduce their exposure to the U.S. dollar, especially amid concerns over dollar weaponization and sanctions.
By diversifying into gold, central banks aim to reduce reliance on dollar-denominated assets and better manage currency risk.
This is particularly relevant for emerging economies or countries that may be vulnerable to Western financial pressures.
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Geopolitical Risk Protection
Gold tends to outperform during times of war, sanctions, and global instability.
As geopolitical tensions rise — whether due to the Russia-Ukraine conflict, U.S.-China trade dynamics, or unrest in the Middle East — central banks are turning to gold for its perceived safety.
Gold cannot be frozen or seized like foreign reserves held abroad, making it a strategic safe-haven asset in the event of international conflict or sanctions.
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Support for Currency Stability
For countries with fragile or weakening currencies, gold offers a buffer. Central banks can bolster their foreign exchange reserves and signal financial strength by increasing gold holdings.
In countries like Turkey or Argentina, gold accumulation also helps manage investor perception, stabilize local currencies, and hedge against extreme volatility in exchange rates.
Even developed nations are adding gold to support their monetary credibility in uncertain times.
Which Countries Are Buying the Most Gold?
Central banks around the world now hold over 36,000 metric tons of gold—roughly one-fifth of all the gold ever mined.
Since 2009, they’ve been consistent net buyers, and in the past decade, have snapped up about one in every eight ounces produced.
This isn’t random: gold is increasingly seen as the ultimate protection against inflation, sanctions, and geopolitical uncertainty.
Rank | Country | Gold Added (Metric Tons) | Total Gold Reserves (2024) | Key Highlights |
|---|---|---|---|---|
1 | Russia | 1,230.6 | 2,332 | Pegged ruble to gold; prepping for sanctions |
2 | China | 1,210.2 | 2,235 | Long-term buyer; paused purchases recently |
3 | Türkiye | 475.6 | 584 | Domestic demand and gold tradition |
4 | Poland | 295.0 | 316 | Targeting 20% of reserves in gold |
5 | India | 291.4 | 822 | Strong cultural and economic interest |
6 | Kazakhstan | 132.6 | 332 | Top global producer, planning rebalancing |
7 | Uzbekistan | 126.3 | 373 | 80% of FX reserves now in gold |
8 | Singapore | 101.5 | 236 | Record reserves post-2024 surge |
9 | Qatar | 96.3 | 100+ | Strategic hedge for oil-based economy |
10 | Hungary | 91.4 | 110 | Highest per capita gold in Eastern Europe |
As central banks shift away from fiat volatility, gold’s appeal as a finite, unprintable, and politically neutral reserve asset is only growing.
How Do Central Banks Buy And Store Gold?
Central banks typically purchase gold either directly from domestic production or on international markets via over-the-counter (OTC) trades.
These purchases are often facilitated by large bullion banks or through the Bank for International Settlements (BIS), which can act as an intermediary for anonymous transactions.
For example, the People’s Bank of China discreetly adds to its reserves through the Shanghai Gold Exchange, often without immediately reporting the increase.
In contrast, countries like Russia acquire gold from domestic miners, paying in local currency to reduce reliance on foreign exchange.
The gold is usually stored in secure vaults, such as the Bank of England’s gold vault, or at central banks' own high-security facilities.
What Central Bank Gold Buying Means for Individual Investors?
As central banks continue accumulating gold, it signals deeper systemic concerns — and provides cues for everyday investors to consider gold too.
A sign of long-term uncertainty: When major institutions stockpile gold, it suggests a lack of trust in fiat currencies or geopolitical stability. This can be a cue for individual investors to diversify with gold during uncertain times.
Potential for price support: Central bank demand acts as a price floor. For example, the surge in 2024 purchases helped gold prices hit all-time highs. Investors who bought gold before these trends saw solid appreciation.
Portfolio hedging insight: Central banks use gold to hedge against inflation and currency devaluation. Similarly, individuals can hold gold (physical or via ETFs) to protect their portfolios when inflation spikes or the dollar weakens.
Take Poland, which increased its reserves to 20% in gold. A retail investor following this model might consider allocating 5–10% of their assets into physical bullion, gold ETFs, or mining stocks, depending on risk tolerance.
Gold isn’t just for nations — it’s a signal and a shield for everyday portfolios, especially in volatile or inflationary climates.
FAQ
The U.S. gold reserves, managed by the Treasury and stored at places like Fort Knox, total about 8,133 metric tons – the largest in the world.
This varies widely; some countries hold under 5%, while others like Russia and Poland aim for 15–20% of total reserves in gold.
Gold purchases are priced based on the spot market, typically through over-the-counter (OTC) trades or negotiated bulk deals.
There are no formal limits, but central banks usually follow internal policies or international agreements like the Central Bank Gold Agreement (CBGA).
The IMF holds gold and advises member countries on reserve management but doesn't control national gold holdings unless under specific financial arrangements.
Yes, most notably in the U.S. in 1933 under Executive Order 6102, which required citizens to surrender gold to the government.
Yes, countries like Germany and Venezuela have repatriated gold stored abroad to regain control or due to trust concerns.
They mainly buy physical gold, but some may hold gold-related financial instruments for diversification or liquidity management.
