Central Banks' Gold Purchases Hit 2-Year High... "Gold Prices to Hit Record High Within 2 Years"

With central banks’ gold purchases in September reaching their highest level in about two years, forecasts are emerging that gold prices will hit a record high within the next two years.

Reuters-Yonhap News

According to the Financial Times (FT) on October 14 (local time), central banks’ gold purchases in September totaled approximately 63 metric tons, according to preliminary figures compiled by the World Gold Council (WGC). This was the highest level in about two years, since November 2024. The WGC compiled the figures based on data from central banks and the International Monetary Fund (IMF).

Meanwhile, fund managers forecast that increased safe-haven demand amid geopolitical tensions and economic and financial market uncertainty will support gold prices over the medium to long term.

Charlotte Young, a fund manager at Troy Asset Management, forecast at the FT Precious Metals Symposium that gold prices would hit a record high within the next 12 to 18 months. She said U.S. national debt was surging and that central banks were likely to expand the money supply if a recession occurred in the future. She described gold as an ideal hedge against deteriorating government finances, emphasizing that “gold cannot be printed like money.”

Paul Carney, chief investment officer (CIO) for Europe, the Middle East and Africa at Aon Investments, also forecast that gold prices would hit a record high within the next two years. He noted that the United States’ use of the dollar as a tool of policy pressure could weaken confidence in the currency. “If the dollar is weaponized, it would be no surprise if people stopped using it,” he said, asking, “What would they use instead of the dollar?” He added that gold could be an alternative to the dollar.

Peter Marrone, chairman and chief executive officer (CEO) of mining company Allied Gold, warned of the possibility of a financial crisis. “Investors should ask themselves whether we are in the early stages of a financial crisis,” he said. “It seems we are on the eve of a major event in the financial markets.” He added that amid growing macroeconomic uncertainty, family offices, which manage the wealth of ultra-high-net-worth individuals, were reducing their holdings of government bonds and increasing their gold purchases.

Ian Cockerill, CEO of gold producer Endeavour Mining, also said that macroeconomic uncertainty, weakening confidence in fiat currencies, and central banks’ efforts to find ways to protect the value of their domestic currencies were supporting gold prices. “These factors are providing strong support for gold prices,” he said. “I don’t know whether $4,000 per troy ounce is the floor, but I believe prices are very close to a low point ahead of the next upward cycle.”

Suki Cooper, head of commodities research at SC Global, said central banks’ demand for gold remained very strong. However, she explained that some central banks had sold gold this year as some countries sought to raise funds following the outbreak of war between the United States and Israel against Iran.

Industry executives also forecast that central banks’ gold purchases would increase further as confidence in the dollar weakened and the search for alternative assets gained momentum.

This content was produced with the assistance of AI translation services.