China, India Lead Growth In World Gold Reserves Even As Prices Rally
A net 19 tonne of gold was purchased globally in February, a 58% decline from January’s purchases, stemming in part from a higher volume of sales.
Gold reserves with central banks across the world rose for the ninth straight month in February, led by growth in China and India, according to data from the World Gold Council.
A net 19 tonne of the yellow metal was purchased globally, a 58% decline from January’s purchases, stemming in part from a higher volume of
sales.
Of this, the People’s Bank of China accounted for 12 tonnes, while the Reserve Bank of India and the National Bank of Kazakhstan each bumped up their holdings by 6 tonnes.
India's holdings had increased by 8 tonnes in January. Bullion's share in the country's total forex reserves stood at 8.5%.
Worldwide, 35,976 tonne of gold are held in reserves, of which the top 11 countries and the European Central Bank own 25,340 tonne. Central banks and other official institutions have been a key source of gold demand since 2010.
"Despite slower demand from central banks in February, the year has got off to a healthy start and the broad trend of gold-buying remains intact," Krishan Gopaul, senior analyst at the WGC, said in a note.
Central banks hold gold as part of their reserves to manage risk from currency holdings, diversify portfolio and promote stability during economic turmoil. It also acts as a hedge against inflation.
The US, Germany and Italy are the countries with the largest gold reserves. China—bullion's biggest market—occupies the sixth place, with over 2,250 tonnes held in its vault.
Central banks in Uzbekistan and Jordan saw their gold reserves decline by 12 and 4 tonne, respectively.
India's gold reserves saw an increase of $347 million, rising to $51.49 billion for the week ending March 22, according to data released by the RBI last week. Foreign exchange reserves surged by $140 million to a record $642.63 billion.
Bullion prices have rallied over 25% since October on hopes the US Federal Reserve will start cutting interest rates by mid-2024 and heavy buying by central banks.
