World central banks continued to expand their gold reserves in November. According to the World Gold Council, they bought a total of 50 tons of gold in net terms, which is half more than in October. From January to November last year, central banks bought 673 tons of gold, which is 200 tons more than during the entire year of 2021, when global reserves were at almost 30-year highs.
The largest increase was announced by the People's Bank of China, which expanded its reserves by 32 tons to a total of 1,980 tons of gold. China increased its gold reserves in November for the first time since September 2019. There may be several reasons why gold reserves have increased. Diversification of assets can be considered the main one, as today's world is uncertain and markets are characterized by their volatility. Another reason may be protection, strengthening of one's own currency, the yuan, in an uncertain geopolitical time, especially vis-à-vis the US. Simply put, behind this hoarding there may be some preparation for heightened situations where gold is a solid asset, should there be unexpected situations that would affect the currency, etc. It is therefore expected that the hoarding of gold will continue. China has been one of the largest buyers of gold on the world market for the past 20 years. The People's Bank of China expanded its gold reserves by 1,448 tons between 2002 and 2019 alone.
The second most active central bank in November was the Turkish Central Bank, which expanded its reserves by 19 tons. Since the beginning of 2022, it has expanded its reserves by 123 tons of gold, making it the most active central bank in the world from January to November. As a result, its official gold reserves rose to 517 tons.
The third most active in November was also the central bank of the Kyrgyz Republic, which increased its reserves for the first time since the beginning of the year. It bought 3 tons during the month, increasing its total gold reserves to 16 tons (up 61% year-on-year).