In a chartbook with some 20 great charts, Philip Klapwijk explains in great detail the state of gold holdings by central banks.
As one of the chart shows, central banks have shifted from net seller to net buyer of gold since 2010. Gross gold sales have collapsed (especially from Europe / Central Bank Gold Agreement) while China and Russia by far the most important buyers; relatively few other countries have added gold to reserves.
Moreover, the chartbook has an extremely interesting chart about the top central bank gold holders across the globe. As seen on below chart, European cenral banks (combined) hold the highest amount of physical gold, even more than the U.S. In total, Europe holds 56% of gold compared to their total reserves, while the U.S. holds 72% of gold on its total reserves.
Some other highlights from the report:
- Central banks have gone through a massive reduction in gold loans / swaps by central banks in last 10-plus years.
- They have faced credit issues with counterparty commercial banks.
- They have seen a collapse in borrowing demand from producer hedging.
- There is a slump in gold lease rates
- Net official sector purchases should continue over the next few years at least:
- Existing large holders (CBGA, US, IMF) are still unlikely sellers
- There is a bias towards purchases rather than sales in Rest-of-World
- China and Russia may continue to add gold to reserves
Download the full chartbook.