Central banks across the globe have been stocking up their gold reserves at record levels in 2024 in a pivot to store of value assets.
In a Sept. 2 X post, macroeconomics outlet, the Kobeissi Letter reported that global net gold purchases by central banks reached 483 tonnes in the first half of 2024, the most on record.
It added that the figure is 5% higher than the previous record of 460 tonnes which was set in the first half of 2023. In the second quarter of 2024, central banks bought 183 tonnes of gold, marking a 6% increase year over year.
The National Bank of Poland, the Reserve Bank of India and the Central Bank of Turkey were the largest central bank buyers of the precious metal during the period.
In late August, it was reported that the president of the National Bank of Poland, Adam Glapinski, revealed that the bank would continue to buy gold, as it aimed for it to comprise 20% of its reserves.
Central bank gold demand in the first half of 2024. Source: Kobeissi Letter
Tolou Capital Management founder Spencer Hakimian commented that China, India, Russia and Saudi Arabia “no longer trust owning Western reserve assets,” adding, “Gold is the only neutral and non-volatile reserve asset.”
Largest central bank increases in gold reserves, Q2 2024. Source: World Gold Council
In a Sept. 1 X post, tech entrepreneur Kim Dotcom said that a new gold-backed stablecoin from the BRICS nations (Brazil, Russia, India, China, South Africa, Iran, Egypt, Ethiopia and the United Arab Emirates) will increase demand for the asset and result in dollar instability:
“When the BRICS gold-backed stablecoin comes out trade in USD will drop hard, central banks will exit USD and the US money printing Ponzi scheme will burn. 14% of global GDP will shift from the US to other nations by 2030.”
Meanwhile, “Global Markets Investor” commented that “gold has seen one of the best runs in history,” adding that it is up 23% year-to-date beating the S&P 500 gain of 18%.
Comparatively, Bitcoin (BTC) has appreciated 37% so far in 2024, despite a 22% decline from its March all-time high.
Related: Bitcoin price may need 3 months to copy gold bull run — Analyst
Nevertheless, it didn’t stop goldbug and crypto detractor Peter Schiff from commenting that Bitcoin gains only occurred in the first two months of 2024 and it has fallen back since then despite spot BTC exchange-traded funds launching in the United States.
Gold prices hit an all-time high of $2,525 per ounce on Aug. 27, and Schiff declared that “The momentum has turned.” However, the bottom line is that BTC has still outperformed gold so far this year.
Central banks remain wary of the relatively new asset class for now, however.