In 2025, central bank demand is projected to exceed the long-term average of 500 tonnes, continuing to bolster gold prices. However, a dip below this level could introduce headwinds for the metal.
It can be noted that the main reason for the 2024 rally in gold prices was the demand from leading central banks, which was mostly led by the Reserve Bank, which snapped up 48 per cent of all central bank buying in October, acquiring 27 tonnes in the month. Other central banks collectively bought 60 tonnes in the month.
The Reserve Bank added a whopping 27 tonnes to its reserves, taking the total tonnage to 882, according to the latest data from the World Gold Council.
The RBI has purchased as much as 77 tonnes between January and October, according to WGC data, based on the reported monthly numbers from the International Monetary Fund (IMF).
It can be noted that gold had touched its historic high prices in October, crossing the USD 2750/ounce mark, and the buying happened at the historically highest prices – maybe prices skyrocketed due to the demand from central banks.
The October purchase represents a five-fold increase compared to the same period of 2023, said the WGC. With this purchase, the country’s total gold reserves stood at 882 tonnes, of which 510 tonnes are held in the country and the rest are mostly in London, Zurich, and New York.
The RBI has been on a gold-buying spree between April 2022 and September 2024 when it added close to 100 tonnes to the reserves.
