According to the latest report from the World Gold Council (WGC), central banks’ demand for gold is not over yet. In January, central banks bought an additional 18 tons of gold.

In 2024, central banks bought a total of 1,045 tonnes of gold, marking the third consecutive year that gold purchases exceeded 1,000 tonnes.

The WGC report shows that central banks in emerging markets continue to lead in net buying.

The Central Bank of Uzbekistan was the biggest buyer in January, increasing official reserves by 8 tonnes.

China continues to play a leading role after its central bank bought another 5 tonnes of gold. This is the third month China has increased its gold reserves after a 6-month pause last year.

Gold currently accounts for 6% of China’s total foreign exchange reserves, a figure that many analysts say is still too low for China to compete with the US dollar as a global reserve currency.

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Central banks race to fill their gold vaults. Photo: Kitco

The Central Bank of Kazakhstan was the third-largest buyer of gold in January. Timur Suleimenov, chairman of the National Bank of Kazakhstan, said the bank had discussed moving to currency neutrality in its gold purchases, with the aim of boosting international reserves and protecting the economy from external shocks.

The bank began selling dollars - a move that could be seen as linked to its gold purchases.

The National Bank of Poland and the Reserve Bank of India each bought 3 tonnes of gold. The Czech National Bank increased its gold reserves by 2 tonnes and the Central Bank of Qatar bought 1 tonne of gold.

On the selling side, the Central Bank of Russia and the Central Bank of Jordan each sold 3 tons of gold. The National Bank of the Kyrgyz Republic sold 2 tons.

Marissa Salim, senior research director at the WGC, said gold remains an important asset for central banks in the face of heightened geopolitical risks. Central banks continue to play a key role in global gold demand.

“The shift from armed conflict to broader economic tensions has reinforced the trend of central banks net buying from 2022. Many central banks have used temporary price declines as buying opportunities,” the expert analyzed.

Regarding the gold market in the coming time, Salim said that gold prices will be supported by the increasing trend of de-globalization. The tariff threats of US President Donald Trump are pushing many emerging market countries to diversify their assets away from the US dollar.

Recently, Mr. Trump has caused a global trade war after applying a 25% tariff on imported products from Mexico and Canada and an additional 10% tariff on imports from China.

Towards $3,300/ounce

Ole Hansen, head of commodity strategy at Saxo Bank, said gold has room to move higher after a brief correction, saying the $3,000 an ounce target is back in play.

"Gold remains supported by many factors. Technical charts signal strong demand despite selling pressure from centralized traders. In addition to diversification and safe-haven demand, gold is likely to continue to benefit from central bank buying as concerns over fiscal debt persist," said Ole Hansen.

Along with geopolitical uncertainty supporting gold's safe-haven appeal, Hansen said the precious metal is benefiting from the greenback's growing weakness as the dollar index tests key support at 106.

He also noted that slowing economic activity is raising expectations that the US Federal Reserve (Fed) will be forced to cut interest rates this year, even as inflation remains high.

Hansen kept his new gold price target at $3,300 an ounce.