Central banks across the globe have been stocking up their gold reserves at record levels this year in a pivot to store of value assets.
In a post on X on Sept. 2, macroeconomics outlet, the Kobeissi Letter reported that global net gold purchases by central banks reached 483 tonnes in the first half of 2024, the most on record.
It added that the figure is 5% higher than the previous record of 460 tonnes which was set in the first half of 2023. In Q2 2024, central banks bought 183 tonnes of gold, marking a 6% increase year-over-year.
The National Bank of Poland, the Reserve Bank of India, and the Central Bank of Turkey were the largest central bank buyers of the precious metal for the period.
In late August, it was reported that the president of the National Bank of Poland, Adam Glapinski, revealed that the bank would continue to buy gold, aiming for the asset to make up 20% of its reserves.
Central bank gold demand, H1, 2024. Source: Kobeissi Letter
Tolou Capital Management founder, Spencer Hakimian, commented that China, India, Russia, and Saudi Arabia “no longer trust owning Western reserve assets,” before adding “Gold is the only neutral and non-volatile reserve asset.”
Largest central bank increases in gold reserves, Q2 2024. Source: World Gold Council
Tech entrepreneur Kim Dotcom said in a post on X on Sept. 1 that a new gold-backed stablecoin from the BRICS nations will increase demand for the asset and result in dollar instability.
“When the BRICS gold-backed stablecoin comes out trade in USD will drop hard, central banks will exit USD and the US money printing Ponzi scheme will burn. 14% of global GDP will shift from the US to other nations by 2030.”
Meanwhile, “Global Markets Investor” commented that “gold has seen one of the best runs in history,” adding that it is up 23% year-to-date beating the S&P 500 gain of 18%.
Comparatively, the digital store of value, Bitcoin (BTC), has made 37% so far in 2024 and that is despite a 22% decline from its March all-time high.
Nevertheless, it didn’t stop goldbug and crypto detractor Peter Schiff from commenting in a post on X on Sept. 1 that Bitcoin gains only occurred in the first two months of the year and it has fallen back since then despite the spot ETF launches in the US, while gold has increased.
Gold prices hit an all-time high of $2,525 per ounce on Aug. 27. Schiff declared that “The momentum has turned,” but the bottom line is that BTC has still outperformed gold so far this year.
Central banks remain wary of the relatively new asset class for now, however.
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