Mining
Charted: 30 Years of Central Bank Gold Demand
Subscribe to the Elements free mailing list for more like this
30 Years of Central Bank Gold Demand
This was originally posted on Elements. Sign up to the free mailing list to get beautiful visualizations on natural resource megatrends in your email every week.
Did you know that nearly one-fifth of all the gold ever mined is held by central banks?
Besides investors and jewelry consumers, central banks are a major source of gold demand. In fact, in 2022, central banks snapped up gold at the fastest pace since 1967.
However, the record gold purchases of 2022 are in stark contrast to the 1990s and early 2000s, when central banks were net sellers of gold.
The above infographic uses data from the World Gold Council to show 30 years of central bank gold demand, highlighting how official attitudes toward gold have changed in the last 30 years.
Why Do Central Banks Buy Gold?
Gold plays an important role in the financial reserves of numerous nations. Here are three of the reasons why central banks hold gold:
- Balancing foreign exchange reserves
Central banks have long held gold as part of their reserves to manage risk from currency holdings and to promote stability during economic turmoil. - Hedging against fiat currencies
Gold offers a hedge against the eroding purchasing power of currencies (mainly the U.S. dollar) due to inflation. - Diversifying portfolios
Gold has an inverse correlation with the U.S. dollar. When the dollar falls in value, gold prices tend to rise, protecting central banks from volatility.
The Switch from Selling to Buying
In the 1990s and early 2000s, central banks were net sellers of gold.
There were several reasons behind the selling, including good macroeconomic conditions and a downward trend in gold prices. Due to strong economic growth, gold’s safe-haven properties were less valuable, and low returns made it unattractive as an investment.
Central bank attitudes toward gold started changing following the 1997 Asian financial crisis and then later, the 2007–08 financial crisis. Since 2010, central banks have been net buyers of gold on an annual basis.
Here’s a look at the 10 largest official buyers of gold from the end of 1999 to end of 2021:
Rank | Country | Amount of Gold Bought (tonnes) | % of All Buying |
---|---|---|---|
#1 | 🇷🇺 Russia | 1,888 | 28% |
#2 | 🇨🇳 China | 1,552 | 23% |
#3 | 🇹🇷 Türkiye | 541 | 8% |
#4 | 🇮🇳 India | 395 | 6% |
#5 | 🇰🇿 Kazakhstan | 345 | 5% |
#6 | 🇺🇿 Uzbekistan | 311 | 5% |
#7 | 🇸🇦 Saudi Arabia | 180 | 3% |
#8 | 🇹🇭 Thailand | 168 | 2% |
#9 | 🇵🇱 Poland | 128 | 2% |
#10 | 🇲🇽 Mexico | 115 | 2% |
Total | 5,623 | 84% |
Source: IMF
The top 10 official buyers of gold between end-1999 and end-2021 represent 84% of all the gold bought by central banks during this period.
Russia and China—arguably the United States’ top geopolitical rivals—have been the largest gold buyers over the last two decades. Russia, in particular, accelerated its gold purchases after being hit by Western sanctions following its annexation of Crimea in 2014.
Interestingly, the majority of nations on the above list are emerging economies. These countries have likely been stockpiling gold to hedge against financial and geopolitical risks affecting currencies, primarily the U.S. dollar.
Meanwhile, European nations including Switzerland, France, Netherlands, and the UK were the largest sellers of gold between 1999 and 2021, under the Central Bank Gold Agreement (CBGA) framework.
Which Central Banks Bought Gold in 2022?
In 2022, central banks bought a record 1,136 tonnes of gold, worth around $70 billion.
Country | 2022 Gold Purchases (tonnes) | % of Total |
---|---|---|
🇹🇷 Türkiye | 148 | 13% |
🇨🇳 China | 62 | 5% |
🇪🇬 Egypt | 47 | 4% |
🇶🇦 Qatar | 33 | 3% |
🇮🇶 Iraq | 34 | 3% |
🇮🇳 India | 33 | 3% |
🇦🇪 UAE | 25 | 2% |
🇰🇬 Kyrgyzstan | 6 | 1% |
🇹🇯 Tajikistan | 4 | 0.4% |
🇪🇨 Ecuador | 3 | 0.3% |
🌍 Unreported | 741 | 65% |
Total | 1,136 | 100% |
Türkiye, experiencing 86% year-over-year inflation as of October 2022, was the largest buyer, adding 148 tonnes to its reserves. China continued its gold-buying spree with 62 tonnes added in the months of November and December, amid rising geopolitical tensions with the United States.
Overall, emerging markets continued the trend that started in the 2000s, accounting for the bulk of gold purchases. Meanwhile, a significant two-thirds, or 741 tonnes of official gold purchases were unreported in 2022.
According to analysts, unreported gold purchases are likely to have come from countries like China and Russia, who are looking to de-dollarize global trade to circumvent Western sanctions.
Lithium
Ranked: The Top 10 EV Battery Manufacturers in 2023
Asia dominates this ranking of the world’s largest EV battery manufacturers in 2023.
The Top 10 EV Battery Manufacturers in 2023
This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.
Despite efforts from the U.S. and EU to secure local domestic supply, all major EV battery manufacturers remain based in Asia.
In this graphic we rank the top 10 EV battery manufacturers by total battery deployment (measured in megawatt-hours) in 2023. The data is from EV Volumes.
Chinese Dominance
Contemporary Amperex Technology Co. Limited (CATL) has swiftly risen in less than a decade to claim the title of the largest global battery group.
The Chinese company now has a 34% share of the market and supplies batteries to a range of made-in-China vehicles, including the Tesla Model Y, SAIC’s MG4/Mulan, and various Li Auto models.
Company | Country | 2023 Production (megawatt-hour) | Share of Total Production |
---|---|---|---|
CATL | 🇨🇳 China | 242,700 | 34% |
BYD | 🇨🇳 China | 115,917 | 16% |
LG Energy Solution | 🇰🇷 Korea | 108,487 | 15% |
Panasonic | 🇯🇵 Japan | 56,560 | 8% |
SK On | 🇰🇷 Korea | 40,711 | 6% |
Samsung SDI | 🇰🇷 Korea | 35,703 | 5% |
CALB | 🇨🇳 China | 23,493 | 3% |
Farasis Energy | 🇨🇳 China | 16,527 | 2% |
Envision AESC | 🇨🇳 China | 8,342 | 1% |
Sunwoda | 🇨🇳 China | 6,979 | 1% |
Other | - | 56,040 | 8% |
In 2023, BYD surpassed LG Energy Solution to claim second place. This was driven by demand from its own models and growth in third-party deals, including providing batteries for the made-in-Germany Tesla Model Y, Toyota bZ3, Changan UNI-V, Venucia V-Online, as well as several Haval and FAW models.
The top three battery makers (CATL, BYD, LG) collectively account for two-thirds (66%) of total battery deployment.
Once a leader in the EV battery business, Panasonic now holds the fourth position with an 8% market share, down from 9% last year. With its main client, Tesla, now sourcing batteries from multiple suppliers, the Japanese battery maker seems to be losing its competitive edge in the industry.
Overall, the global EV battery market size is projected to grow from $49 billion in 2022 to $98 billion by 2029, according to Fortune Business Insights.
-
Travel1 week ago
Airline Incidents: How Do Boeing and Airbus Compare?
-
Markets2 weeks ago
Visualizing America’s Shortage of Affordable Homes
-
Green2 weeks ago
Ranked: Top Countries by Total Forest Loss Since 2001
-
Money2 weeks ago
Where Does One U.S. Tax Dollar Go?
-
Misc2 weeks ago
Almost Every EV Stock is Down After Q1 2024
-
AI2 weeks ago
The Stock Performance of U.S. Chipmakers So Far in 2024
-
Markets2 weeks ago
Charted: Big Four Market Share by S&P 500 Audits
-
Real Estate2 weeks ago
Ranked: The Most Valuable Housing Markets in America