SINGAPORE – Singapore’s central bank was the third-largest buyer of gold in the world for the first nine months of 2023, after its counterparts in China and Poland, according to the World Gold Council (WGC).
The Monetary Authority of Singapore (MAS) bought four tonnes of gold on regulated gold exchanges in the third quarter of 2023, bringing its total purchases so far in 2023 to 75 tonnes, the council said.
The People’s Bank of China was the largest buyer, having raised its reserves of the yellow metal by 78 tonnes during the third quarter.
Since the start of 2023, China’s central bank has increased its gold holdings by 181 tonnes to 2,192 tonnes, representing 4 per cent of its total reserves.
The National Bank of Poland also continued its buying spree in the third quarter, adding 57 tonnes to bring its gold accumulation to 105 tonnes so far in 2023.
“Central banks continue to value the benefits that gold can bring to their reserve portfolios – diversification, downside protection and liquidity,” said Mr Shaokai Fan, WGC’s head of Asia-Pacific excluding China and its global head of central banks.
“For Singaporeans, it means that their currency and economy have even more layers of protection against an uncertain world,” he told The Straits Times.
Gold helps to diversify the reserves of central banks, which are responsible for their nations’ currencies. These can be subject to swings in value, depending on the perceived strength or weakness of the underlying economy.
As gold carries no credit or counterparty risks, it serves as a source of trust in a country and in all economic environments, making it one of the most crucial reserve assets worldwide, alongside government bonds.
WGC noted in its report on third-quarter trends that the strength of gold-buying by central banks exceeded its expectations, which suggested that increasing gold allocations is becoming an accepted prudential strategy.
Globally, central banks continue to buy gold at a historic pace, boosting demand in the third quarter to 1,147 tonnes, 8 per cent ahead of its five-year average.
Central banks grew their bullion reserves by 337 tonnes in the third quarter, compared with an increase of 175 tonnes in the second quarter.
However, the latest third-quarter net purchases failed to match the exceptional 459 tonnes bought in the third quarter of 2022.
In the first nine months of 2023, central banks bought 800 tonnes, more than in any January-September period in WGC’s data, which goes back to 2000.
“This strong buying streak from central banks is expected to stay on course for the remainder of the year, indicating a robust annual total again in 2023,” WGC said.
