In Recent Years, Central Banks Have Increased Their Gold Purchases—Often in Secret
Waleed Farouk
In recent years, central banks have significantly ramped up their gold purchases—many of which have been carried out in complete secrecy. Gold has regained a strategic position in the portfolios of central banks around the world, but what's particularly striking is the growing number of "hidden" or undisclosed purchases. This trend has sparked widespread questions in economic and financial circles: Why are some countries keeping their gold buying under wraps? And what do they aim to achieve through this secrecy?
Rising Purchases, Murky Details
According to the World Gold Council, central bank gold purchases have reached their highest levels in decades over the past two years. A large portion of these operations were not publicly disclosed at the time, categorized under "unreported entities."
In its latest report, the Council noted that around 20% of central bank gold purchases in 2023 were made without revealing the identities of the buying parties—an unprecedented rate since the collapse of the Bretton Woods system.
Central banks added 1,037 tonnes of gold to their reserves in 2023, marking the second-largest annual purchase in history after 2022. The upward trend continued in 2024, with purchases totaling 1,045 tonnes. China was among the most prominent buyers, boosting its gold reserves for 17 consecutive months.
Known buyers include China, Russia, Turkey, and India, but the increase in undisclosed purchases suggests that other nations are quietly moving for reasons that may be economic, political, or strategic.
Why Are Central Banks Buying Gold—And Why in Secret?
1. Diversification and Risk Hedging
Central banks view gold as a safe-haven asset and a reliable store of value, especially during times of economic crisis and geopolitical instability. Gold helps diversify a country's foreign reserves, reducing dependence on a single currency like the U.S. dollar. This diversification provides protection against inflation and currency fluctuations, and it also reduces the risk of asset freezes or seizures in case of economic sanctions.
2. Geopolitical Tensions and Distrust in the Dollar
Amid the growing use of the U.S. dollar as an economic weapon, some countries have sought to diversify away from the American financial system. Following the freezing of Russia's foreign reserves in 2022, many central banks realized that the U.S. dollar could be weaponized. This realization has led numerous nations—particularly emerging economies—to seek alternatives. Gold, being politically neutral, offers a safe option amid these tensions.
3. De-dollarization
Gold is now seen as a strategic alternative to the Western-led financial system. Some countries—especially China and Russia—have been stockpiling gold as part of efforts to build a new, more dollar-independent monetary system. BRICS countries, in particular, are aiming to reduce the dominance of the U.S. dollar in global finance. Large-scale gold purchases are part of a broader strategy to strengthen local currencies and reduce reliance on the dollar in international trade. This reflects a desire to construct a more multipolar world order.
4. Currency Protection
Some nations, such as Egypt and Turkey, are buying gold to protect their local currencies from devaluation and to diversify their investments. In the event of a crisis, gold can easily be converted into any currency, providing central banks with liquidity and flexibility.
Additionally, some central banks opt to purchase gold secretly to avoid causing panic or negative expectations in their domestic markets. Announcing large gold acquisitions might be interpreted as a signal of weakness or lack of confidence in the local currency or financial system—something governments are keen to avoid.
Who Are the 'Unknown Buyers'?
While countries like China and India have been gradually disclosing their purchases, other players—possibly from Asia, the Middle East, or Latin America—prefer to stay in the shadows, at least until they've secured their targeted quantities.
Data analysis suggests that these "undisclosed buyers" may be aiming to bolster financial independence amid geopolitical tensions, support their currencies amid inflationary pressures or economic stress, and safeguard their reserves from risks tied to the global financial system.
Many central banks, especially China's, reportedly conduct their gold purchases in strict secrecy. It is believed that about two-thirds of these transactions go unreported officially. This discretion aims to avoid impacting global gold prices, maintain market stability, and prevent attention being drawn to their reserve diversification strategies.
What Could This Trend Mean?
Ultimately, this movement could be part of a structural shift in the global financial system. Confidence in traditional paper-based assets is waning, and gold is reemerging as a 'silent anchor' in global monetary policy. If this trend continues, we could be entering a new phase where the global economic power map is redrawn—not just on the ground or in energy markets, but also in gold vaults.
The rising trend of central bank gold buying—particularly when done in secrecy—reflects a strategic shift in reserve management. Fears over geopolitical conflict, distrust in the dollar, and the need for asset diversification are driving banks to strengthen their holdings in gold as a safe and reliable haven in an uncertain world. This trend is expected to continue, potentially impacting global gold prices in the near future.
read more
CBE: Deposits in Local Currency Hit EGP 5.25 Trillion
Morocco Plans to Spend $1 Billion to Mitigate Drought Effect
Gov't Approves Final Version of State Ownership Policy Document
Egypt's Economy Expected to Grow 5% by the end of 2022/23- Minister
Qatar Agrees to Supply Germany with LNG for 15 Years
Business
Oil Prices Descend amid Anticipation of Additional US Strategic Petroleum Reserves
Business
Suez Canal Records $704 Million, Historically Highest Monthly Revenue
Business
Egypt's Stock Exchange Earns EGP 4.9 Billion on Tuesday
Business
Wheat delivery season commences on April 15
News
China Launches Largest Ever Aircraft Carrier
Sports
Former Al Zamalek Player Ibrahim Shika Passes away after Long Battle with Cancer
Lifestyle
Get to Know 2025 Eid Al Adha Prayer Times in Egypt
Business
Fear & Greed Index Plummets to Lowest Level Ever Recorded amid Global Trade War
Arts & Culture
Zahi Hawass: Claims of Columns Beneath the Pyramid of Khafre Are Lies
News
Flights suspended at Port Sudan Airport after Drone Attacks
News
Shell Unveils Cost-Cutting, LNG Growth Plan
Videos & Features
Video: Trending Lifestyle TikToker Valeria Márquez Shot Dead during Live Stream
Technology
50-Year Soviet Spacecraft 'Kosmos 482' Crashes into Indian Ocean
News
3 Killed in Shooting Attack in Thailand
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Mid East Info
7 hours ago
- Mid East Info
Brent crude briefly breaches $70 amid Iran attack threats – Saxo Bank MENA - Middle East Business News and Information
Ole Hansen, Head of Commodity Strategy, Saxo Bank Crude oil markets remain caught in a tug-of-war between bullish near-term demand and rising geopolitical risks on one hand, and macroeconomic headwinds and rising OPEC+ production on the other. In the last hours, Brent crude briefly traded above USD 70 and touched highs last seen in April before drifting lower, as traders continue to digest a mix of conflicting drivers. On the bullish side, seasonal summer demand continues to tighten supplies. With peak travel and air conditioning usage underway, refiners are scrambling to meet surging gasoline and diesel demand, supporting near-term pricing. In their weekly crude and fuel stock report, the US Energy Information Administration reported a bigger-than-expected drop in crude oil inventories, not least due to refineries nationwide processing the most crude since December 2019 in order to meet summer demand. However, this short-term tightness is increasingly expected to be offset by rising OPEC+ output into the autumn months, as a group of eight OPEC+ members aggressively restores production in an effort to reclaim market share, and a so far unsuccessful attempt to penalise above-quota producers amid current price strength. The added barrels should, over time, temper price gains while raising concerns about a potential oversupply if demand growth stalls. Further complicating the picture are economic uncertainties tied to current global trade tensions. The latest wave of tariff threats, despite the prospect of a trade truce reset between the US and China, has rekindled fears of slower global growth, which could weigh on long-term oil demand expectations. In addition, President Trump told journalists that the US, within weeks, will be sending letters to its trading partners in which they will set their terms. Geopolitics, as always, remains a key wildcard that in recent years has rocked prices on several occasions, especially when we are dealing with developments that may disrupt the safe passage and distribution of crude oil and fuel products. The latest surge in Brent above a recent level of resistance around USD 68.50 was triggered by Iranian threats to strike American bases in the Middle East if the nuclear talks collapse and the country is attacked. The US ordered some staff to depart its embassy in Baghdad due to heightened security risks, while the UK Maritime Trade Operations (UKMTO) issued a rare warning to mariners that higher tensions could affect shipping, including the Strait of Hormuz—the world's most critical oil transit chokepoint that sees more than 20 million barrels of crude pass through daily. Even a brief disruption there could trigger a sharp price spike, with some analysts warning of a potential move toward USD 100 per barrel in a worst-case scenario. Israel/Iran conflict remains a volatile undercurrent in the oil market In addition, the risk of a full-blown war between Israel and Iran remains a persistent and increasingly volatile undercurrent in the oil market. While not an immediate base-case scenario, it is a geopolitical risk the market cannot afford to fully discount. Tensions have steadily escalated over Iran's nuclear ambitions, and Israel along with the U.S. have long maintained that they will not allow Iran to develop a nuclear weapon—a red line that may drive Israel toward unilateral military action if diplomacy fails. This risk is further amplified by Israel's current political climate, where Prime Minister Benjamin Netanyahu's government faces growing domestic pressure and may see a decisive foreign policy move—such as a strike on Iranian nuclear facilities—as a way to shift the political narrative or consolidate support. On the other side, Iran has vowed to retaliate forcefully if its nuclear infrastructure is attacked, potentially targeting US or Israeli assets directly or through its regional proxy networks. As markets continue to navigate this web of opposing pressures, volatility remains elevated, and traders will be closely watching diplomatic developments, demand signals, and the next steps from OPEC+ for clearer direction. Overall, its our opinion that a price above USD 70 Brent is unlikely to be sustained into the autumn months once we go past the peak summer demand season, and OPEC+ production increases are being felt, however with the risk of a Middle East disruption once again hanging over the market, fundamental driven short-selling appetite is likely to remain muted for now. Key takeaways from weekly EIA report EIA's weekly update showed a surprise 3.64 million barrels reduction in crude stockpiles, while gasoline and distillate stocks both rose with refineries processing the most crude since December 2019 to meet summer demand, leading to a drop in exports to an April low at 3.3 million barrels per day. Some concerns about demand arose after implied gasoline demand on a four-week averaged basis stayed at a five-year seasonal low, while distillates, like diesel demand (apart from 2020) fell to an all-time seasonal low.
See - Sada Elbalad
10 hours ago
- See - Sada Elbalad
Gold Shines Through Fog of War: Israeli Strike on Iran Pushes Prices to One-Month High
Waleed Farouk Just as markets were preparing for the typical summer calm, tensions reignited in the Middle East as Israel launched military strikes against Iranian targets — a move that sent gold prices surging. This was no fleeting jump; gold broke through the $3,425 per ounce mark, reaching its highest level since May. In the wake of this geopolitical escalation, investors wasted no time flocking to gold — the most time-tested safe haven in times of uncertainty. The rally in gold wasn't purely reactionary; it was also fueled by favorable economic conditions, including easing U.S. inflation and a weakening dollar, both of which further boosted the yellow metal's appeal. According to media reports, markets interpreted the Israeli strike as a serious indication that the conflict could escalate — particularly around the strategic Strait of Hormuz. These fears also drove oil prices higher, intensifying global market anxiety as Asian and European stock indices retreated. As markets digest the unfolding situation, one central question arises: how far can this gold rally go? Analysts suggest that surpassing the $3,400 threshold opens the door for a potential test of the $3,500 level if tensions persist. However, they caution that geopolitically driven price spikes are often short-lived, typically fading quickly if de-escalation or a sudden diplomatic breakthrough occurs. Still, what lends this particular surge additional weight is its alignment with supportive economic data — especially the slowdown in U.S. inflation. This could prompt the Federal Reserve to adopt a more dovish stance in the coming months, offering gold a rare double boost: political and economic. In the end, gold emerges as the clear winner in an atmosphere clouded with uncertainty, while global markets closely watch what comes next between Tel Aviv and Tehran. Every new missile may carry with it dozens of added dollars on the price of an ounce. read more CBE: Deposits in Local Currency Hit EGP 5.25 Trillion Morocco Plans to Spend $1 Billion to Mitigate Drought Effect Gov't Approves Final Version of State Ownership Policy Document Egypt's Economy Expected to Grow 5% by the end of 2022/23- Minister Qatar Agrees to Supply Germany with LNG for 15 Years Business Oil Prices Descend amid Anticipation of Additional US Strategic Petroleum Reserves Business Suez Canal Records $704 Million, Historically Highest Monthly Revenue Business Egypt's Stock Exchange Earns EGP 4.9 Billion on Tuesday Business Wheat delivery season commences on April 15 News China Launches Largest Ever Aircraft Carrier Sports Former Al Zamalek Player Ibrahim Shika Passes away after Long Battle with Cancer Lifestyle Get to Know 2025 Eid Al Adha Prayer Times in Egypt Business Fear & Greed Index Plummets to Lowest Level Ever Recorded amid Global Trade War Arts & Culture Zahi Hawass: Claims of Columns Beneath the Pyramid of Khafre Are Lies News Flights suspended at Port Sudan Airport after Drone Attacks News Shell Unveils Cost-Cutting, LNG Growth Plan Videos & Features Video: Trending Lifestyle TikToker Valeria Márquez Shot Dead during Live Stream Technology 50-Year Soviet Spacecraft 'Kosmos 482' Crashes into Indian Ocean News 3 Killed in Shooting Attack in Thailand
See - Sada Elbalad
a day ago
- See - Sada Elbalad
US Dollar Falls to Lowest Level Since April 2022
H-Tayea The US dollar fell sharply on Thursday, with the Dollar Index declining by 0.6% to 97.86 points, its lowest level since April 2022. The drop signals mounting pressure on the American currency amid escalating geopolitical tensions and growing global trade concerns, according to Al Arabiya. The decline occurred during a broad market retreat from risk assets, with the dollar hitting its lowest point so far in 2025, alongside a downturn in major US stock indices from recent record highs. Investors, unsettled by rising instability in the Middle East and renewed uncertainty in U.S.-China trade relations, shifted their capital toward safe-haven assets such as gold and government bonds. The dollar's slide deepened following remarks by US President Donald Trump, who told reporters he plans to send notices to trade partners outlining new tariff rates within the next two weeks. This comes as the 90-day temporary pause on reciprocal tariffs nears its expiration next month. read more Gold prices rise, 21 Karat at EGP 3685 NATO's Role in Israeli-Palestinian Conflict US Expresses 'Strong Opposition' to New Turkish Military Operation in Syria Shoukry Meets Director-General of FAO Lavrov: confrontation bet. nuclear powers must be avoided News Iran Summons French Ambassador over Foreign Minister Remarks News Aboul Gheit Condemns Israeli Escalation in West Bank News Greek PM: Athens Plays Key Role in Improving Energy Security in Region News One Person Injured in Explosion at Ukrainian Embassy in Madrid News China Launches Largest Ever Aircraft Carrier Sports Former Al Zamalek Player Ibrahim Shika Passes away after Long Battle with Cancer Lifestyle Get to Know 2025 Eid Al Adha Prayer Times in Egypt Business Fear & Greed Index Plummets to Lowest Level Ever Recorded amid Global Trade War Arts & Culture Zahi Hawass: Claims of Columns Beneath the Pyramid of Khafre Are Lies News Flights suspended at Port Sudan Airport after Drone Attacks News Shell Unveils Cost-Cutting, LNG Growth Plan Videos & Features Video: Trending Lifestyle TikToker Valeria Márquez Shot Dead during Live Stream Technology 50-Year Soviet Spacecraft 'Kosmos 482' Crashes into Indian Ocean News 3 Killed in Shooting Attack in Thailand
