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Charted: 30 Years of Central Bank Gold Demand

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central bank gold demand

30 Years of Central Bank Gold Demand

Did you know that nearly one-fifth of all the gold ever mined is held by central banks?

Besides investors and jewelry consumers, central banks are a major source of gold demand. In fact, in 2022, central banks snapped up gold at the fastest pace since 1967.

However, the record gold purchases of 2022 are in stark contrast to the 1990s and early 2000s, when central banks were net sellers of gold.

The above infographic uses data from the World Gold Council to show 30 years of central bank gold demand, highlighting how official attitudes toward gold have changed in the last 30 years.

Why Do Central Banks Buy Gold?

Gold plays an important role in the financial reserves of numerous nations. Here are three of the reasons why central banks hold gold:

  • Balancing foreign exchange reserves
    Central banks have long held gold as part of their reserves to manage risk from currency holdings and to promote stability during economic turmoil.
  • Hedging against fiat currencies
    Gold offers a hedge against the eroding purchasing power of currencies (mainly the U.S. dollar) due to inflation.
  • Diversifying portfolios
    Gold has an inverse correlation with the U.S. dollar. When the dollar falls in value, gold prices tend to rise, protecting central banks from volatility.
  • The Switch from Selling to Buying

    In the 1990s and early 2000s, central banks were net sellers of gold.

    There were several reasons behind the selling, including good macroeconomic conditions and a downward trend in gold prices. Due to strong economic growth, gold’s safe-haven properties were less valuable, and low returns made it unattractive as an investment.

    Central bank attitudes toward gold started changing following the 1997 Asian financial crisis and then later, the 2007–08 financial crisis. Since 2010, central banks have been net buyers of gold on an annual basis.

    Here’s a look at the 10 largest official buyers of gold from the end of 1999 to end of 2021:

    Rank CountryAmount of
    Gold Bought (tonnes)
    % of
    All Buying
    #1🇷🇺 Russia 1,88828%
    #2🇨🇳 China 1,55223%
    #3🇹🇷 Türkiye 5418%
    #4🇮🇳 India 3956%
    #5🇰🇿 Kazakhstan 3455%
    #6🇺🇿 Uzbekistan 3115%
    #7🇸🇦 Saudi Arabia 1803%
    #8🇹🇭 Thailand 1682%
    #9🇵🇱 Poland1282%
    #10🇲🇽 Mexico 1152%
    Total5,62384%

    Source: IMF

    The top 10 official buyers of gold between end-1999 and end-2021 represent 84% of all the gold bought by central banks during this period.

    Russia and China—arguably the United States’ top geopolitical rivals—have been the largest gold buyers over the last two decades. Russia, in particular, accelerated its gold purchases after being hit by Western sanctions following its annexation of Crimea in 2014.

    Interestingly, the majority of nations on the above list are emerging economies. These countries have likely been stockpiling gold to hedge against financial and geopolitical risks affecting currencies, primarily the U.S. dollar.

    Meanwhile, European nations including Switzerland, France, Netherlands, and the UK were the largest sellers of gold between 1999 and 2021, under the Central Bank Gold Agreement (CBGA) framework.

    Which Central Banks Bought Gold in 2022?

    In 2022, central banks bought a record 1,136 tonnes of gold, worth around $70 billion.

    Country2022 Gold Purchases (tonnes)% of Total
    🇹🇷 Türkiye14813%
    🇨🇳 China 625%
    🇪🇬 Egypt 474%
    🇶🇦 Qatar333%
    🇮🇶 Iraq 343%
    🇮🇳 India 333%
    🇦🇪 UAE 252%
    🇰🇬 Kyrgyzstan 61%
    🇹🇯 Tajikistan 40.4%
    🇪🇨 Ecuador 30.3%
    🌍 Unreported 74165%
    Total1,136100%

    Türkiye, experiencing 86% year-over-year inflation as of October 2022, was the largest buyer, adding 148 tonnes to its reserves. China continued its gold-buying spree with 62 tonnes added in the months of November and December, amid rising geopolitical tensions with the United States.

    Overall, emerging markets continued the trend that started in the 2000s, accounting for the bulk of gold purchases. Meanwhile, a significant two-thirds, or 741 tonnes of official gold purchases were unreported in 2022.

    According to analysts, unreported gold purchases are likely to have come from countries like China and Russia, who are looking to de-dollarize global trade to circumvent Western sanctions.

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Visualizing Mining’s Footprint in British Columbia

Mining represents 7% of British Columbia’s GDP despite only accounting for 0.04% of the land use.

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Mining Footprint in British Columbia

Visualizing Mining’s Footprint in British Columbia

British Columbia is considered a global leader in the development of socially and environmentally responsible resources.

An estimated 54% of the province’s total land is protected, making it one of the world’s greenest mining hubs.

This graphic by the B.C. Regional Mining Alliance (BCRMA) details mining’s footprint in the province.

A Tier 1 Jurisdiction for Mining

British Columbia covers almost 95 million hectares (234 million acres), more than any European country except Russia, and more than any U.S. state except Alaska.

As the largest mining province in Canada, BC registered $18 billion in revenue from the industry in 2022.

British Columbia stands as Canada’s sole producer of molybdenum, which finds applications in metallurgy and chemistry. Additionally, B.C. is the country’s leader producer of copper and steelmaking coal, besides gold and silver.

B.C. mined material breakdown

At the heart of British Columbia’s mining industry lies the Golden Triangle, one of the hottest mineral exploration districts in the world.

More than 150 mines have operated in the area since prospectors first arrived at the end of the 19th century. The region alone is endowed with minerals worth more than $800 billion.

How Green is B.C. Mining

Mining represents 7% of the province’s Gross Domestic Product (GDP), despite only accounting for 0.04% of the land use. In comparison, farmland demands 3% of the land, bringing $2.1 billion (0.8%) per year.

Land Use in B.C.Revenue (2022, CAD $)
Mining 0.04%$18.0 billion
Oil & Gas 0.4%$9.5 billion
Infrastructure1%$25.0 billion
Farmland3%$2.1 billion
Forest62%$13.3 billion

Mining operations are also supported by a stable, transparent, and effective policy environment. The province ranked as the world’s least risky for mining in 2017 and 2018.

In addition, mineral exploration has received ample support from local Indigenous communities. Today, mining accounts for over two-thirds of all indigenous people employed in the extractives sector.

According to the International Energy Agency, up to six times more minerals and metals will be needed by 2040 to accelerate the energy transition.

In this scenario, British Columbia is well positioned to support the transition to a low-carbon future and make a significant contribution to climate action.

The BCRMA is a strategic partnership between indigenous groups, industry, and government representatives that aims to promote B.C.’s mining opportunities internationally.

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Mapped: The 10 Largest Undeveloped Silver Deposits in the World

Global silver demand is poised to soar in the next decade, driven by emerging technologies like EVs and solar power.

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Ranked: The Largest Undeveloped Silver Deposits in the World

Global silver demand is poised to soar in the next decade, driven by emerging technologies like electric vehicles and solar power.

Silver demand from solar alone has grown from less than 50 million ounces (Moz) a decade ago to an expected 160 Moz in 2023.

So, where will the necessary supply come from to meet this surge? This graphic from Discovery Silver shows the largest undeveloped silver deposits in the world.

Silver in Green Technology

Silver is a vital part of solar cells. The metal is converted into paste and coated onto silicon wafers to make solar arrays.

When sunlight hits the silicon, silver helps to transport the generated electricity for immediate use or store it in batteries. A typical solar panel can contain as much as 20 grams of silver.

Silver’s conductivity and corrosion resistance are vital in electronics, especially electric vehicles where nearly all electrical connections rely on the metal. Over 50 million ounces of silver are used every year to enhance conductivity in powered seats, windows, and other vehicle electronics.

In 2022, 27% of all silver consumption in the U.S. was attributed to electrical and electronics, while 10% was linked to solar technology.

Global Silver Demand Rising

With the increasing demand for new technologies combined with physical investment (bars) demand, the silver market saw a 237.7 Moz deficit in 2022, an all-time record.

2023 silver industrial demand is forecasted to rise by 4% to a new record high.

However, according to the Silver Institute, mined output is expected to decline over the next five years.

In this scenario, new mines are expected to play an important role in meeting the demand.

Currently, the world’s top 10 undeveloped silver deposits contain 984 Moz. Discovery Silver’s Cordero project in Mexico leads the ranking:

RankProjectOwnerCountryContained Silver Reserves (Moz)
1CorderoDiscovery SilverMexico266
2Corani Bear Creek Mining CorporationPeru229
3Prognoz Polymetal International plcRussia125
4Bowdens Silver Mines LimitedAustralia66
5Santa Ana Formerly Bear CreekPeru63
6FuwanMinco Silver CorporationChina55
7Nueva EsperanzaKingsgate Consolidated LimitedChile48
8Vares Adriatic Metals PLCBosnia & Herzegovina47
9Terronera Endeavour Silver Corp.Mexico47
10MenkechkaGeoProMining Ltd.Russia38

Cordero is located in Chihuahua State in Mexico, one of the world’s most prolific silver producing regions.

Once in production, it is expected to become one of the top three silver mines in the world.

As silver demand is expected to soar, Discovery Silver offers direct investment exposure to this paradigm shift through its Cordero Project. Click here to learn more about Discovery Silver.

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