(Kitco News) - The People’s Bank of China dominated the gold market in 2023, and while the central bank continued to buy gold in November, purchases slowed significantly compared to previous months.
Quoting data released in early December, Krishan Gopaul, market analyst at the World Gold Council, reported on social media that China’s central bank bought 11.8 tonnes of gold last month.
“This brings YTD net purchases to 216t, and lifts total gold holdings to 2,226t (11% higher than December 2022),” he said in the social media post.
According to the World Gold Council, this is the smallest increase in the PBOC’s gold reserves since March.
Analysts do not expect China to ease up on its gold purchases as the nation continues diversifying away from the U.S. dollar.
China’s gold reserves currently represent about 4% of its total holdings, well below other industrialized nations.
“PBoC's reserve is much, much smaller than its geopolitical competitors,” said commodity analysts at TD Securities in their 2024 gold market outlook. “The US holds some 69% of its FX reserve in the form of gold, Germany 68%, the Russian Federation 25% and India 8%. If Beijing increased the yellow metal's FX reserve to just 10%, it would be in the market to buy over an additional 3,000t.”
Even if China slows down, other countries continue to buy at a solid pace. Last week, Gopaul noted that preliminary data suggests the National Bank of Poland bought 19 tonnes of gold in November. This is the eighth consecutive month Poland’s central bank has increased its gold reserves.
“This lifts YTD net buying to ~130 tonnes and total gold reserves to ~360 tonnes,” he said.
Turkey was the clear leader in the gold market last month. Gopaul said that data from the Central Bank of Turkey shows it bought 25 tonnes of gold, extending its buying streak to six consecutive months.
“YTD net sales now total 19 tonnes, with total gold reserves at 522 tonnes,” he said.
The Czech National Bank was also busy buying gold in November, adding 3 tonnes to its reserves.
“YTD net gold purchases now total almost 18 tonnes, with total gold holdings at around 30 tonnes,” Gopaul said.
While central banks were net purchasers in November, Gopaul highlighted two banks that sold the precious metal in November.
According to IMF data, the National Bank of Kazakhstan sold 3 tonnes of gold last month.
“Total gold holdings now amount to 304 tonnes, 47 tonnes lower than at the start of the year,” said Gopaul.
At the same time, the Central Bank of Uzbekistan sold 11 tonnes of gold last month, pushing year-to-date sales to 34 tonnes, he said.
