A New Era in the Global Gold Market

While traditionally London, New York and Zurich have been the leading gold markets, the global gold market is undergoing a shift. Increasingly, the focus is shifting from the West to the East, in line with the changes in the global political order.

Increasing demand from the East

Central banks in Eastern countries buy more and more gold, often even more than their Western counterparts. This trend was confirmed in 2022, when central banks Record quantities gold. China, Poland, Singapore, Libya, India, and the Czech Republic were some of the biggest buyers.

The Shanghai Cooperation Organization (SCO) has shown a notable increase in gold purchases since 2001, illustrating a shift towards institutional gold demand in the East. A similar trend can also be seen within the BRICS countries.

Rise of Gold Trading Infrastructures in the East

Not only does the East collect gold, but it is also increasingly becoming a prominent gold producer. Countries such as China, the United Arab Emirates and Russia are expanding their gold trading infrastructure, with the aim of being less dependent on Western trading centers.

Important developments include the intensified cooperation between the gold markets of China and Russia and the increasing representation of Eastern gold markets in organizations such as the LBMA and the World Gold Council (WGC).

Also, in addition to its advanced OTC gold trading market, India has established a gold futures infrastructure. Opened in July 2022, the IIBX makes it possible for qualified buyers to import gold directly to India. 

Private Gold Demand Shifts to the East

Interest in gold has also increased among retail consumers in the East. China and India together accounted for nearly half of global consumer demand for gold in 2022. The Gold price in Eastern currencies has risen significantly, indicating gold's value-preserving properties in challenging geopolitical and macroeconomic conditions.

A New "Gold Standard" in the East

The shift of gold demand from West to East goes beyond governments and includes institutional and private investors. Gold flows to places where it is most valued and where economic prosperity and savings rates increase. In the medium term, this shift should be supported by higher growth prospects in Asia and the Middle East.

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On behalf of Holland Gold, Paul Buitink and Joris Beemsterboer interview various economists and experts in the field of macroeconomics. The aim of the podcast is to provide the viewer with a better picture and guidance in an increasingly rapidly changing macroeconomic and monetary landscape. Click here  to subscribe.