CENTRAL BANKS ARE GRABBING GOLD

The world’s central banks stockpiled an additional 399 tons of gold in this year’s third quarter, about twice the previous quarterly record, the World Gold Council reported.

Three-quarters of the banks were not identified in the council’s report.

Most banks report their gold purchases to the International Monetary Fund, although many keep their purchases secret.

Among the most likely secretive buyers:

China, the world’s second-largest economy, rarely publicizes its gold purchases. In 2015, after being silent for six years, the country revealed it held 600 tons more gold than it had previously reported, shocking the market.

China has not reported gold purchases since 2019, fueling speculation that it is among the main recent buyers.

In addition to the 300 tons of gold China mines each year, it has imported 902 tons through October in 2022. It does not report how much goes to commercial uses and how much Beijing squirrels away.

China also has been seeking alternatives to the U.S. dollar for its international transactions. Relations with the U.S. have soured and, after Russia invaded Ukraine, the U.S. showed its willingness to sanction central banks in response to a government’s bad behavior.

Russia is the world’s second-largest gold miner, but its exports have been shut down by Western sanctions as punishment for Russia’s Ukraine war. China and India, which have remained trading partners with Russia, have been reluctant to buy large amounts, according to the Financial Times.

Russia’s central bank might have stepped in to buy what the Kremlin was unable to sell elsewhere, the FT said.

Saudi Arabia and other oil exporting countries may have plowed some of their windfall profits this year into gold as a way to diversify their holdings and safeguard their wealth, the FT added.

TREND FORECAST: As we have forecast, gold prices have hit their bottom. And with interest rates and inflation rising across the globe which in turn will produce Dragflation—plus our forecasts for geopolitical conflicts to escalate—prices of the world’s most precious safe-haven asset, gold, will continue to rise… and by their purchasing deeds, many governments know it.