Latest news with #ShaokaiFan
CNBC
15-07-2025
- Business
- CNBC
Central banks are increasingly buying gold from local mines as prices surge
Central banks are increasingly looking to bolster their gold reserves. And they are turning to mines in their backyard to source the yellow metal. Besides being cheaper, securing gold directly from mines helps support local industry and bolsters reserves without weighing on foreign exchange reserves, experts said. While countries such as the Philippines and Ecuador have been doing this for years, more central banks with access to domestic gold mines have started, increased, or are considering direct local purchases, according to the World Gold Council. Nineteen out of 36 respondents in the World Gold Council's latest central bank survey said they are buying gold directly from domestic artisanal and small-scale gold miners in local currency. Four are thinking of following suit. This is a slightly higher figure than last year's survey, when around 14 central banks out of 57 said they were buying directly from domestic sources. "One trend that we're seeing is that some central banks, especially in Africa, Latin America, are starting to buy gold directly from domestic, small-scale gold mines, which have really proliferated because of the higher price," said Shaokai Fan, global head of central Banks at WGC. Central banks of Colombia, Tanzania, Ghana, Zambia, Mongolia and the Philippines are relying on domestically mined gold to build up reserves, according to the industry body. Ghana Gold Board — the state agency managing gold purchases on behalf of the Bank of Ghana — in April secured agreements with several mining companies to buy 20% of their gold output, Reuters reported. Last September, Tanzania's mining authority reportedly mandated that all gold exporters, including miners and traders, put aside at least 20% of their output to sell to the central bank. "You can make an argument that it's cheaper than buying gold on the international market, because a lot of these central banks buy gold at a slight discount to the international price," Fan said. Traditionally, central banks acquire gold through the global over-the-counter market — typically centered in London — where gold is transacted via major bullion banks, priced in U.S. dollars, euros, or sterling. These purchases often involve high-purity London Good Delivery or LGD bars, which meet global trading standards and are stored in top-tier vaults such as those at the Bank of England. Because of gold's soaring prices and its attractiveness as a hedge against geopolitical risks, it is natural that the central banks of producer nations would turn to domestic output, said Adrian Ash, director of research at gold investment firm BullionVault. Gold prices have been on a tear, scaling fresh highs amid geopolitical uncertainties and waning confidence in other traditional safe havens. Spot gold prices are currently trading at $3,328.3 per ounce, up almost 27% year to date, data from LSEG showed. Buying domestic mine output saves on banking and intermediary fees, as well as shipping costs. However, countries need to pay for processing and refining the metal to LGD standard — the de facto international benchmark for large gold bullion. These processes need to be done overseas if the country doesn't have domestic LGD refining, which will add costs, Ash said. Central banks that buy gold bars from local mines and have domestic LGD refining capacity, nullify those additional costs. The Philippines' central bank, for instance, is a certified LGD refiner. Kazakhstan has two refiners accredited by the London Bullion Market Association. Russia had seven until they were suspended in 2022 after the country invaded Ukraine. Others such as Ghana and Zambia might need to rely on external refiners, offsetting part of the upfront savings. Another compelling driver for buying domestic gold is monetary flexibility. Purchasing gold through the international market often requires dollars — a reserve asset. That means central banks must swap one reserve for another. But that won't be the case if they use local currencies to buy gold from their own backyard. "You're able to grow your reserves using local currency and therefore not sacrifice another reserve asset to grow your gold reserves," said WGC's Fan. With rising global debt levels, trade and geopolitical risks on the cards, central banks want to strengthen their reserve buffers to shield against sudden financial shocks. Holding more reserves — in multiple forms — provides ammunition to manage potential crises. Out of the 73 central banks surveyed by the WGC, around 95% said they expect peers across the world to raise gold reserves over the next year. In the past, if these central banks wanted to buy gold, they would probably just purchase it on the international market, Fan explained. "But if you have local gold production in your country, a lot of central banks are thinking, well, maybe we can use this local gold production instead and add the reserves this way," he added. Providing support for domestic mining sectors and respective local communities are also key drivers for central banks purchases via local mines. Demand for gold in some countries is too small, and central banks are incentivized to support mining operations in the country, which in turn generates jobs, said Nicky Shiels, head of research and metals strategy at MKS PAMP. Shiels, however, noted that purchasing gold via local mines comes with risks. Central bank purchases through international markets often via leading bullion banks offer greater trust and minimize reputational risks for central banks, she said. Much of the gold being bought domestically comes from artisanal and small-scale gold mining — ASGM has been linked with poor labor practices, environmental damage, and illegal smuggling. But it can also be argued that central banks, with their institutional credibility and financial weight, are in a good position to formalize and clean up that supply chain, said WGC's Fan. "Central banks can harness their massive buying power to do good for these artisanal, small scale miners," he said. "Having a credible, large-scale buyer like the central bank gives small-scale miners a legal and fair outlet to sell their gold," said Fan. "That not only diverts flows away from criminal networks but also improves traceability and accountability." "That's exactly how we describe it as — a win-win."
Time of India
17-06-2025
- Business
- Time of India
Gold set to gain share in forex reserves as dollar outlook dims: WGC
Gold reserves: A World Gold Council survey shows nearly half of central banks plan to boost gold reserves amid geopolitical risks. Gold may outpace the US dollar, with growing preference for safer, non-dollar assets including yuan and euro. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Gold could eat into the share of the US dollar in central bank forex holdings worldwide over the next five years, an annual World Gold Council (WGC) survey showed, underscoring a broad-based tilt toward safe-haven assets in a trading environment rocked by geopolitics and unpredictable trade tariffs. The yuan and the euro, too, might see share gains that reflect the shifting trade currents.'Nearly half of the central bank respondents intend to increase their own gold holdings in the coming year,' said Shaokai Fan, Global Head of Central Banks & Head of Asia-Pacific (ex-China). 'This is remarkable, especially considering how many record-high prices we've hit so far in 2025.'Gold prices have continued to surge through this year, in part aided by institutional purchases, after a record 2024 surge.'Notably, this reflects the current global financial and geopolitical environments,' Shaokai Fan said. 'Gold remains a strategic asset as the world faces uncertainty and tumult. Central banks are concerned about interest rates, inflation, and instability – all reasons to turn to gold to mitigate risk.'Central banks have bulked up gold holdings in recent years amid geopolitical and economic uncertainty. WCG said that central banks accumulated over 1,000 tonne of gold in each of the last three years, up significantly from the average 400-500 tonne over the preceding to the survey, which collected data from 73 of the world's central banks, were less sanguine about the prospects of the US dollar, which still is the world's reserve currency and the monetary unit in which goods are priced survey also revealed that 95% of respondents believe that global central bank gold reserves will increase over the next 12 months. This is a record high since it was first tracked in the 2019 survey and represents a 17% increase from the 2024 findings, WGC the American currency dollar maintains its position as the dominant global reserve currency, data from the International Monetary Fund's Currency Composition of Official Foreign Exchange Reserves (COFER) shows that the dollar's share has been on a gradual decline.'The majority of respondents (73%) see moderate or significantly lower US dollar holdings within global reserves over the next five years. Respondents also believe that the share of other currencies, such as the euro and renminbi, as well as gold, will increase over the same period,' the WCG survey said. Bank of Baroda May report, based on the WGC data, had shown that the gold holding by central banks climbed 4.1% annually between 2009 and top 10 holders are the US, Germany, Italy, France, Switzerland, Japan, Netherlands, China, Russia, and India.
Time of India
17-06-2025
- Business
- Time of India
Central banks set to boost gold holdings amid economic and geopolitical uncertainty: World Gold Council
Central banks anticipate an increase in official sector gold holdings amid a backdrop of geopolitical and economic uncertainty, according to a report released by the World Gold Council today. More than nine in ten (95%) reserve managers indicated that they expect central banks to continue increasing their gold holdings in the next 12 months, according to the new 2025 data released by WGC. This is a record high since it was first tracked in the 2019 survey and represents a 17% increase from the 2024 findings. The 2025 Central Banks Gold Reserves (CBGR) survey, which collected data from a record 73 of the world's central banks, also finds that nearly 43% of central banks plan to add to their gold reserves within the next year. Reserve managers' favourable view of gold persists even in the face of record-high gold prices and 15 successive years of central bank gold buying . Gold continues to be used as a safe-haven asset to help mitigate risks as ongoing economic and geopolitical uncertainty continues to weigh on reserve managers. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like After Losing Weight Kevin James Looks Like A Model 33 Bridges Undo The top three current motivations for holding the asset have shifted to its long-term store of value (80%), its role as an effective portfolio diversifier (81%), and its performance in times of crisis (85%). Central banks in emerging markets and developing economies (EMDE) have once again maintained their positive outlook for gold's future share in reserve portfolios. Notably, 28 out of 58 (48%) EMDE respondents thought that their gold reserves would increase in the next 12 months, compared to 3 out of 14 (21%) of advanced economy respondents, more than last year. Live Events Although interest rate levels remained a key component of both groups' motivators for holding gold, inflation (84%) and the geopolitical situation (81%) were top of mind for EMDEs, while 67% and 60% of advanced economy respondents felt the same. Notably, more central banks are increasingly storing gold domestically: 59% said they have gold in domestic storage, up from 41% in 2024. Additionally, most respondents (73%) see moderately or significantly lower US dollar holdings within global reserves over the next five years. However, respondents also believe that other currencies, such as the euro and renminbi, as well as gold, will increase their share over the same period. Shaokai Fan, Global Head of Central Banks & Head of Asia-Pacific (ex-China), commented: 'After eight years of conducting this survey, we have reached an important milestone: nearly half of the central bank respondents intend to increase their gold holdings in the coming year. This is remarkable, especially considering how many record-high prices we've hit so far in 2025. Notably, this reflects the current global financial and geopolitical environments. Gold remains a strategic asset as the world faces uncertainty and tumult. Central banks are concerned about interest rates, inflation, and instability – all reasons to turn to gold to mitigate risk.'
Mint
17-06-2025
- Business
- Mint
More Central Banks Than Ever Plan to Build Up Their Gold Hoards
(Bloomberg) -- A record share of the world's central banks plans to accumulate more gold over the next 12 months, drawn by bullion's performance during times of crisis and protection against inflation. In a survey of 72 monetary authorities, 43% said they expected their gold reserves to increase, up from 29% a year earlier and the highest figure in eight years of data collected by the World Gold Council and YouGov. None anticipated a decline. Central banks have been one of the most important drivers of a long-running gold rally that has seen prices double since late-2022. The pace of buying doubled after the invasion of Ukraine, when the freezing of much of Russia's foreign currency holdings highlighted the appeal of bullion as a reserve asset. 'There are some pretty big moves in some of these numbers,' said Shaokai Fan, global head of central banks for the WGC, a trade body representing gold miners. 'Western countries have stopped selling and emerging market countries have started buying, they're catching up and building more gold reserves.' The overwhelming majority of respondents said they thought central bank gold reserves would increase globally over the next 12 months. The most commonly cited relevant factors for holding gold were its performance during crises, its role as a portfolio diversifier and a store of value. Central banks have been mopping up more than 1,000 tons for each of the last three years, and are set to continue that pace of buying this year, according to consultancy Metals Focus. They have been net buyers for the last 15 years, reversing net sales that drove a decade-long bear market in the 1990s. The buying helped gold overtake the euro as the second-largest asset in the reserves of the world's central banks late last year. US dollar assets, mostly Treasuries, extended a steady decline to reach 46% of global reserves. Among the factors that threaten to accelerate the decline of the US dollar's share of global reserves are the country's yawning fiscal deficits, confiscation risk and speculation that foreign creditors may be treated less favorably. All that stands to benefit gold. More than half of the central banks from emerging economies in the survey said that gold's lack of political risk was a relevant factor behind their decision to hold gold, while 78% cited its lack of default risk. But the US dollar is not in danger of losing its status as the dominant reserve asset anytime soon. 'Central banks are looking at the dollar and the Treasury market with a little bit more care than they would earlier on,' Fan said. 'But I don't think that this is a sort of mad rush for the doors.' More stories like this are available on
India Gazette
17-06-2025
- Business
- India Gazette
Central banks will continue to increase gold reserves amid geopolitical, economic uncertainty: WGC survey
New Delhi [India], June 17 (ANI): More than nine in ten (95 per cent) reserve managers indicated that they expect central banks to continue increasing their gold holdings in the next 12 months, according to new 2025 data released by the World Gold Council on Tuesday. This report comes on the backdrop of geopolitical and economic uncertainty. This is a record high since it was first tracked in the 2019 survey and represents a 17 per cent increase from the 2024 findings. The 2025 Central Banks Gold Reserves (CBGR) survey, which collected data from a record 73 of the world's central banks, also finds that nearly 43 per cent of central banks plan to add to their own gold reserves within the next year. Reserve managers' favourable view of gold persists even in the face of record-high gold prices and 15 successive years of central bank gold buying. Gold continues to be used as a safe-haven asset to help mitigate risks as ongoing economic and geopolitical uncertainty continues to weigh on reserve managers. The top three current motivations for holding the asset have shifted to its long-term store of value (80 per cent), its role as an effective portfolio diversifier (81 per cent), and its performance in times of crisis (85 per cent). Central banks in emerging markets and developing economies (EMDE) have once again maintained their positive outlook for gold's future share in reserve portfolios. Notably, 28 out of 58 (48 per cent) EMDE respondents thought that their own gold reserves would increase in the next 12 months, compared to 3 out of 14 (21 per cent) of advanced economy respondents, more than last year. Although interest rate levels remained a key component of both groups' motivators for holding gold, inflation (84 per cent) and the geopolitical situation (81 per cent) were top of mind for EMDEs, while 67 per cent and 60 per cent of advanced economy respondents felt the same. Notably, more central banks are increasingly storing gold domestically: 59 per cent of the respondents said they have gold in domestic storage, up from 41 per cent in 2024. Additionally, most respondents (73 per cent) see moderately or significantly lower US dollar holdings within global reserves over the next five years. However, respondents also believe that other currencies, such as the euro and renminbi, as well as gold, will increase their share over the same period. Shaokai Fan, Global Head of Central Banks & Head of Asia-Pacific (ex-China), commented: 'After eight years of conducting this survey, we have reached an important milestone: nearly half of the central bank respondents intend to increase their own gold holdings in the coming year.' 'This is remarkable, especially considering how many record-high prices we've hit so far in 2025. Notably, this reflects the current global financial and geopolitical environments. Gold remains a strategic asset as the world faces uncertainty and tumult. Central banks are concerned about interest rates, inflation, and instability - all reasons to turn to gold to mitigate risk,' added Shaokai Fan. The research was conducted by the World Gold Council in partnership with YouGov between 25 February and 20 May 2025, with 73 responses from central banks around the world. This is an increase in sample size from the previous year, which had 70 responses. (ANI)
