Central banks driving 23% of gold demand, led by EM.

TLDR:

• Central banks account for 23% of global gold demand, with emerging markets leading the way.
• Gold prices have increased by 14% year-to-date, reaching new all-time highs.

Central banks globally are responsible for 23% of the total gold demand, a significant increase compared to previous years. The rise in gold prices, up 14% year-to-date, is attributed to persistent and historically elevated purchases by central banks, especially in emerging markets like China. Analysts believe that this trend will continue, supporting Wells Fargo’s target price range for 2024 and 2025. Central banks are turning to gold as a reserve asset with no counterparty risk, providing protection against devaluation and diversifying their reserves from U.S. Treasury yields. As national debt levels rise, central banks are increasingly concerned about counterparty risk, making gold an attractive option for safeguarding their wealth from economic uncertainties.