Central bank purchases of gold have run red hot for more than a year now, providing fundamental support to the yellow metal and underlining its role as a safe store of value and alternative to the greenback for many emerging economies. We’re seeing this happen again this month, with the World Gold Council reporting that India and Turkey have both signalled their clear intention to grow their gold holdings even further.
According to the latest data, Turkey increased its gold reserves by 12 tonnes in January, meaning it’s now within a few tonnes of its all-time gold highs. This is the seventh straight month of net purchases for the nation, with figures showing it’s currently sitting on 552 tonnes.
India too has also shifted into buying mode, with the Reserve Bank of India buying nine tonnes in January. This could mark the beginning of a new spree, after it opted not to add bullion to its vaults in November or December.
We will see more central banks upping the ante on gold purchases over the next few months as they look to move away from the U.S. dollar. With America facing an election year and its next president uncertain, more nations could look to the safety and surety of gold.
