As Central Banks Load Up in Q1 2023, Demand for Gold Skyrockets

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Last Updated on: 9th March 2023, 12:38 am

All around the world, central banks are adding physical gold bullion to their reserves. In fact, this past January saw over 30 tons of the yellow metal added to the Treasuries of countries such as Turkey and China. 

This continues the massive boom in global gold stockpiling by central banks in 2022, in which $70 billion in gold bullion was added to central bank reserves—by far the biggest year on record for central bank gold buying!

So, what do central bankers know that we don’t?

Runaway inflation over the past two years have proven that the U.S. dollar is simply not as good as gold. Last year, the U.S. inflation rate broke 40-year highs, and wage growth didn’t keep up. While the average American suffered, savvy bankers and investors shored up their wealth by diversifying with hard assets that resist inflation—assets like gold and silver. 

It’s easy to see why. 

Let’s take a look at how gold, silver, and platinum-group metals have performed relative to the U.S. dollar, U.S. Treasury bonds, and the stock market over the past year:

  • S&P 500: (-0.5%)
  • U.S. Dollar: (-6.41%)*
  • Total Bond Index: (-13%)**

(Note: Unless otherwise noted, figures above represent 6-month changes as of March 8, 2023.)

*Current annual inflation figure for January 2023 per Bureau of Labor Statistics’ CPI report

**TBI is updated annually; the figure here, for 2022, was the worst single-year yield for U.S. investment-grade bonds on record.

Clearly, precious metals have been a big winner as interest rates have hiked, stock markets stagnated, and other hard assets (such as real estate) have fallen in value. 

Since Federal Reserve Chairman Jerome Powell is indicating that hawkish interest rates are here to stay (potentially all the way into 2024), many analysts aren’t expecting stocks to go on another bull run until the monetary policy environment shifts. 

Meanwhile, global demand for gold is only increasing, with central bank gold buys increasing 16% month-over-month in January, picking up where 2022 left off. 

If central bankers have more confidence in gold than the U.S. dollar, why don’t you?

Since the Fed’s introduction of tight money policies in late 2021, gold and other precious metals are the only assets that’ve proven they can consistently grow while the money supply tightens. 

In 2023, risk-conscious investors are stocking up on the yellow metal to protect their retirement savings, and shielding their wealth from the effects of runaway inflation. In today’s economic environment, fiat currencies are devaluing, stocks are stagnating, yet gold, silver, and platinum are on the rise. 

Now is as good a time as ever to fortify your position in gold. To add gold or silver to your retirement accounts, consider opening or rolling over a self-directed IRA with any of America’s top-ranked gold investment companies. Sign-up today and enjoy waived fees from select providers for a limited time.

Liam Hunt
Liam Hunt

Liam Hunt, M.A., is a financial writer and analyst covering global finance, commodities, and millennial investing. His coverage has been featured in publications such as the New York Post, Forbes, and Barron's.

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FTC Disclosure: We are an independent blog that aims at providing useful information for retirement account owners interested in alternative assets like precious metals. However, our content does NOT constitute financial advice. Please speak to your financial advisor before making any investment decision. Also, the data quoted on this website represents past performance and does not guarantee future results.


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