Outlook 2024: Central banks set to bulk up further on gold

In a year of major elections globally, including the US, the EU, India and Taiwan, investors' need for portfolio hedges will likely be higher than normal, and should keep demand for gold among central banks and other institutions buoyant.
Outlook 2024: Central banks set to bulk up further on gold

Central banks are expected to extend their gold buying streak into 2024, as prospects of further economic slowdown, geopolitical tensions, and political elections in key markets heighten the need for safe-haven assets.

“Although we believe that the current market expectations of an interest rate cut in the second quarter of 2024 might be too ambitious, we do agree that there is room for the US Fed and other central banks to turn more dovish in the second half of 2024, which could be supportive of gold prices in the medium term,” said Alex Chui, senior strategist in the ETF Business at Value Partners.

Alex Chui
Value Partners

While not a fixed rule, gold prices tend to rise when interest rates go down and vice versa.

“Geopolitically, the ongoing Israeli-Palestinian and Russia-Ukraine conflicts, the ebbs and flows of news surrounding US-China relations, and the elections in Taiwan and the US next year will likely result in heightened market volatility.”

Gold as a safe-haven asset should benefit in such an environment, he told AsianInvestor.


Central banks have been leading buyers of the shiny metal in 2023.

Central banks in China, Poland and Singapore emerged as the top three buyers of gold in the first nine months of 2023, according to data from the World Gold Council.

The People’s Bank of China (PBoC) claimed the title of the largest buyer globally, increasing its gold reserves by 181 tonnes to 2,192 tonnes (equivalent to 4% of total reserves) during the first nine months of 2023, according to the World Gold Council.

The Monetary Authority of Singapore (MAS) was another significant buyer, purchasing about 75 tonnes cumulatively in the first nine months.

Other notable Asian central banks were the Reserve Bank of India and Bangko Sentral ng Pilipinas.

That buying interest is expected to continue into 2024. 

“China has been, and will continue to be, one of the biggest buyers of gold. As of the end of November, China increased its gold holdings for the 13th consecutive month, according to the country’s latest foreign reserve data,” said Chui.

“This is expected to continue as the central bank looks to improve reserve diversification further, as well as to enhance the credibility and propel the internationalisation of the renminbi as a trade-settlement currency.”

Singapore's central bank has been a leading gold buyer in 2023.
Editorial credit: macashop /


More immediately, shifting monetary policy, an economic slowdown, and elevated volatility could create a positive environment for gold in 2024.

Robin Tsui

“A shift to a more dovish Fed supports gold’s prospects, while the US dollar’s outlook in 2024 is lukewarm as scenario of interest rate cuts may spur demand for non-dollar currencies as interest rate spreads narrow globally,” Robin Tsui, gold strategist for SPDRs ETFs in Asia Pacific at State Street Global Advisors (SSGA), told AsianInvestor.

“With growing debt burdens and fiscal deterioration having already led to a credit downgrade for the US this year, the potential for continued uncertainty on the fiscal policy front could create hurdles for the US dollar’s prospects,” said Tsui.

That could be another plus for gold prices, which typically rise when the US dollar weakens and vice versa.

“We also expect gold to be supported by gold ETF investors turning more bullish as volatility rises and gold ETF investor buying to synchronise with central bank and physical gold bars and coins buying to potentially drive gold prices higher,” added Tsui.

Geopolitics added between 3% to 6% of gold's performance in 2023, according to the World Gold Council.

"In a year with major elections taking place globally, including the US, the EU, India and Taiwan, investors' need for portfolio hedges will likely be higher than normal," the research institute said in its 2024 outlook.

Purchases by official institutions also defied expectations for the precious metal over the past two years.

"In 2023, we estimate that excess central bank demand added 10% or more to gold's performance. And they [central banks] will likely continue buying," the outlook report said.

"Even if 2024 does not reach the same highs as the previous two years, we anticipate that any above-trend buying (i.e. more than 450–500 tonnes) should provide an extra boost," the report said.

Tsui sees gold prices in a base-case trading range of $1,950 per troy ounce and $2,200 per troy ounce, and in a more optimistic scenario, between $2,200 per troy ounce and $2,400 per troy ounce.


Central banks' structural demand for increasing gold in their foreign exchange reserves will also likely continue to be positive for gold prices over the long term.

Gold plays a role in diversifying central bank reserves and preventing an over-concentration in US dollars, while offering liquidity in an asset that has no credit risk.

“Emerging markets’ gold reserves remain well below their developed-market peers in terms of both total gold holdings and gold’s percentage of total foreign exchange reserves,” SSGA's Tsui said.

Gold holdings account for 58% of aggregate foreign exchange reserves of developed market central banks, he noted.

Gold held by emerging and frontier market central banks account for about 19% of total foreign exchange reserves among these economies.

"This huge gap shows emerging markets’ potential to accumulate further gold reserves,” said Tsui.

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