• The demand for gold by central banks has risen at the fastest pace in 55 years, according to the World Gold Council.
• China recently purchased 1.03 million ounces of fine gold in November and is the sixth largest country in terms of gold reserves held.
• Wells Fargo’s head of real asset strategy, John LaForge, believes silver could start outperforming gold in 2023.
The gold market has been experiencing a surge in demand recently, with central banks around the world increasing their hoard of the precious metal. The World Gold Council (WGC) recently reported that the demand for gold by central banks has risen at the fastest pace in 55 years. This has been driven by the People’s Republic of China buying hoards of gold during the last year.
China’s State Administration of Foreign Exchange recently revealed that the country purchased 1.03 million ounces of fine gold in November. This is the first time in three years that the country has disclosed such information. With 63.67 million ounces of gold worth $112 billion, China is now the sixth largest country in terms of gold reserves held.
The rise in gold demand has also been reflected in the increase in prices of the precious metal. Close to two months ago, on November 3, a troy ounce of .999 fine gold was trading for $1,629 per unit, but today, prices are 11.48% higher at $1,816 per ounce. Similarly, the price of a troy ounce of .999 fine silver was trading for $19.45 per unit on November 3, and it’s since increased 23.29% higher against the U.S. dollar at $23.98 per ounce.
Wells Fargo’s head of real asset strategy, John LaForge, believes that when silver starts outperforming gold, it usually signals it is „closer to a bull market in precious metals versus the other way.“ LaForge contends that silver could start outperforming gold in 2023.
In conclusion, the demand for gold by central banks has been increasing rapidly, with China’s purchase of 1.03 million ounces of fine gold in November driving this surge. This has been reflected in the prices of gold and silver, with both metals ending the year a lot higher in value than they were 56 days ago on November 3, 2022. Wells Fargo’s head of real asset strategy believes silver could start outperforming gold in 2023 and could signal a bull market in precious metals.