Update: How much gold have central banks bought in recent years?

Central banks have added a lot of gold to their reserves since the 2008 financial crisis. Last year, a record amount of 1,136 tonnes even disappeared into the vaults of central banks. If we dive deeper into the figures, we see that these purchases are largely accounted for by Eurasian countries. And we are not only talking about large countries such as Russia, China and India, but also many smaller countries. In this article, we provide insight into the total gold purchases of central banks on the Eurasian continent. How much gold have they bought since 2008?

If we put the numbers together, we see that Russia has been the most active on the gold market since 2008. Almost every month, the central bank added gold to its stockpile, much of which came from domestic mining production. In the same way, China has also replenished its gold reserves considerably in recent years. In September 2019, China temporarily stopped Buy gold, but in November last year, purchases were made again Resume. India has also more than doubled its gold reserves since the financial crisis. In 2009 with a One-time purchase of almost 200 tonnes from the IMF and since 2018 with periodic purchases. In total, India has bought 429 tonnes of gold since the financial crisis.

Rounding out the top five are Turkey and Kazakhstan, which added 425 and 282.1 tonnes of bullion to their stockpiles, respectively. Other countries that bought a lot of precious metals were Uzbekistan (+225.8 tonnes), Thailand (+160.2 tonnes), Iraq (+124.5 tonnes), Korea (+90.2 tonnes) and Japan (+80.8 tonnes). Below is an overview of all Eurasian countries that have added a total of more than 10 tonnes to their reserves since the 2008 financial crisis.

Gold purchases by Eurasian countries since 2008 (Source: World Gold Council)

More than 5,000 tons of gold sent to Eurasian countries

If we add all these figures together, it turns out that this region as a whole has bought more than 5,000 tons of gold since 2008. This is despite the fact that global gold reserves held by central banks have increased by about 5,500 tonnes over the same period. Most of the world's central bank gold purchases in recent years have come from the Eurasian continent. The first graph below shows the gold purchases of these countries since 2008, the second graph provides insight into the development of the total gold stocks of all central banks worldwide. This graph clearly shows the tipping point of 2008, when Western countries stopped Selling gold and countries in the east withdrew more and more precious metals from the market.

Why central banks buy gold is described earlier in This article: "For central banks, the gold supply is important because this reserve has no counterparty risk. And that is becoming increasingly important in a world with increasing geopolitical tensions and economic sanctions. Last year, Russia's foreign exchange reserves were blocked by Western countries, leaving the central bank unable to use half of its reserves. In that scenario, gold is more attractive because it cannot be sanctioned."

Eurasian countries in particular bought a lot of gold (Source: World Gold Council)

Global gold stock central banks (Source: World Gold Council)

How much gold is there in the world?

The estimates of the Total above-ground gold reserves range from 200,000 to 220,000 tonnes. Of this, 35,495 tonnes are currently in the vaults of central banks, about one-sixth of all the gold currently present above ground. The remainder is mainly in private hands and consists of, among other things, jewellery (46%), investment gold such as Gold Coins and gold bars (22%), and other ornaments and embellishments. Nowadays, the precious metal is also used in numerous electronic devices, from which it can be recycled again and again. The latter two categories together account for about 15% of the above-ground gold supply.

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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.