Central banks added more 1,136 tonnes of gold, with an estimated value of $70 billion to the stockpiles in 2022, which was the highest amount of any year since 1967, as reported by the World Gold Council (WGC) on Tuesday.
Central banks, especially in western Europe, that own huge amounts of bullion, sold hundreds of tonnes per year, but since the financial crisis in 2008-09, European banks have stopped their sales and emerging economies countries like Russia, Turkey, and India have been buying it.
Central banks were satisfied with gold because it could maintain its value through turbulent times, unlike bonds and currencies, gold does not depend on any government or issuer.
Gold could help the central banks diversify their risk away from assets such as U.S. treasuries and the dollar.
The buying has dropped since the spread of COVID-19 but rose in the second half of 2022, as central banks bought 862 tonnes between July and December, according to the WGC.
WGC said that banks in Turkey, China, Egypt, and Qatar bought gold last year, but last year about two third of gold that was bought by central banks was not reported publicly.
Banks from China and Russia did not regularly report information about their gold stockpile. WGC stated that the lagged report by some central banks means that it needs to apply a high degree of uncertainty to its expectations, mostly to the upside.
The purchases by central banks affected global demand last year, which reached 4,741 tonnes, up 18% from 2021 and the highest of any year since 2011.
