According to the World Gold Council (WGC), a record 700 tons of gold have been purchased since the beginning of 2022. Already in Q3 2022, central banks of different countries accumulated 400 tons, four times more than a year ago. The demand for gold this year has been primarily driven by a flight toward safer assets amid scorching inflation. Thus, central banks were diversifying their currency reserves. Meanwhile, some buyers were not included in the World Gold Council report. At the same time, there were several purchases where gold acquirers remained unknown. There was an opinion that the Central Bank of Turkey and Qatar Central Bank purchased the metal. Moreover, some countries such as China and Russia do not publicly report their gold holdings on a regular basis. Nevertheless, the open-source data looks impressive. Central banks globally have scooped almost 700 tons of gold at a pace never seen since 1967. The demand was spurred by 18% on a yearly basis. However, there are several factors that prevent the gold price from rising. “Despite the strong demand, bullion prices are mostly reliant on external factors such as macroeconomic sentiment and the direction of the dollar,” Gnanasekar Thiagarajan, director at Commtrendz Risk Management Services, said. For example, the Fed's monetary policy tightening has significantly affected gold. Higher interest rates forced investors to sell the precious metal as a non-yielding asset.
