Central banks stockpiled gold at the fastest pace in over a year during the first quarter, capitalizing on a sharp price correction to amass 244 tons of the metal, up from 208 tons in the prior quarter, according to the World Gold Council.
Poland, Uzbekistan, and China emerged as the top buyers, driving a wave of accumulation that outpaced sales by several institutions. The net buying surge came despite a volatile start to the year for gold, with prices peaking at a record near $5,600 per ounce on January 29 before tumbling 12% in March—the steepest monthly decline since 2008.
A confluence of factors, including soaring energy prices and the outbreak of the US-Iran war, pressured bullion in Q1. Higher borrowing costs, as central banks signaled potential rate hikes to combat inflation, further dimmed the appeal of the non-yielding asset.
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“It’s the first time in a while that we’ve seen a decent correction in gold,” said John Reade, chief strategist at the World Gold Council. “That has allowed central banks that might have been hanging back, waiting for exactly this opportunity, to come in and scoop up a load.”
Not all institutions joined the buying frenzy. Turkey, Russia, and Azerbaijan offloaded an estimated 115 tons, with motivations ranging from currency protection amid war impacts to addressing budget deficits and regulatory limits on holdings.
Spot gold traded just below $4,600 per ounce ahead of the World Gold Council’s latest figures. The undisclosed nature of much of the central bank buying, not captured in International Monetary Fund data, underscores the opaque dynamics of this market, with estimates compiled using trade statistics and field research by consultancy Metals Focus Ltd.
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