Global central banks now hold more gold than U.S. Treasury securities for the first time since 1996, driven by record purchases and soaring gold prices. Global central banks bought 1,082 metric tonnes in 2022, 1,037 tonnes in 2023, and a record 1,180 tonnes in 2024, compared with an average of 400–500 tonnes during the prior decade. Gold functions as a strategic hedge against inflation and market froth. Leading gold miners have outperformed spot gold and pay dividends while extracting silver and other industrial commodities. Geopolitical conflicts and economic weakness could trigger a technical breakout in gold prices.
While rumors had circulated throughout the year that central banks were accumulating the precious metal, the numbers indeed confirm this. According to the World Gold Council, global central banks bought 1,082 metric tonnes of gold in 2022, 1,037 metric tonnes in 2023, and a record 1,180 metric tonnes in 2024. This is a massive increase from the average 400 to 500 tonnes of gold purchased during the previous decade.
The case for gold and gold miners is compelling for two reasons. First, gold can serve as a strategic hedge against inflation. Second, some top miners extract silver and other essential commodities for industrial applications. Spot gold has surged to all-time highs, surpassing the levels reached in 2020. From a technical perspective, the gold market appears poised for a potential massive breakout, particularly if the ongoing conflicts in the Middle East and Ukraine continue or escalate, and the economy experiences a significant downturn.
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