Central Bank gold demand grows at fastest pace in 55 years, analyst says silver could overtake gold in 2023 – Bitcoin News

According to multiple reports, the People’s Republic of China has been acquiring gold hoards over the past year. As a result, World Gold Council (WGC) statistics show that demand for gold by central banks is growing at the fastest rate in 55 years. Meanwhile, John LaForge, head of real asset strategy at Wells Fargo, argues that when silver starts to outperform gold, it usually indicates “closer to the other side of the precious metals market.”

Central Banks of the world are hoarding large amounts of gold, China recently bought 32 tons of the precious metal

Precious metals such as gold and silver end the year on November 3, 2022 at significantly higher prices than they were 56 days ago. About two months ago, on the same day, a troy ounce of 0.999 pure gold was selling for $1.629. per unit, and today prices are up 11.48% to $1,816/oz. On November 3, one troy ounce of 0.999 fine silver traded at $19.45 per unit, up 23.29% against the US dollar to $23.98/oz.

China’s State Administration of Monetary Affairs announced that the country bought 1.03 million ounces of pure gold in November for the first time in three years. China is the sixth largest country in terms of gold reserves with 63.67 million ounces of gold worth $112 billion.

Data from the World Gold Council (WGC) shows that despite an increase in retail demand, central banks are hoarding gold at an extremely fast pace. A number of reports citing WGC data show that central banks’ current demand for gold has grown at its fastest pace since 1967. China recently announced that the country had bought 1.03 million ounces of pure gold, or the equivalent of 32 tons of the precious metal. China’s State Administration of Monetary Affairs detailed that the purchase cost the country about $1.8 billion.

China has 63.67 million ounces of gold reserves, worth about $112 billion. Adrian Ash, head of research at Bullionvault, told Financial Times (FT) reporter Harry Dempsey that central banks’ flight to gold could indicate that “the geopolitical backdrop is one of mistrust, doubt and uncertainty”. While China is among the giants in gold reserves, along with Germany, the United States, Russia, Italy and France, a number of smaller central banks also buy large amounts of gold. To give a few specific examples, Turkey, Uzbekistan, and Qatar accumulated significant amounts of the precious metal in 2022.

Wells Fargo Real Asset Strategy Analyst Says Silver Signals Exit in Possible Precious Metals Bull Market

Wells Fargo’s head of real asset strategy, John LaForge, said in a recent comment to Kitco News on Dec. 29 that silver is ahead of gold. This is a high beta game. Silver is showing signs that any weakness we see in gold is likely to be short-lived,” LaForge told Kitco’s Anna Golubova.

“When silver starts beating gold, it’s closer to a bull market in precious metals,” the Wells Fargo executive added. LaForge believes gold prices will be between $1,900 and $2,000 in 2023, and he insists silver could outperform the yellow precious metal.

“In a 10+ year supercycle in percentage terms, silver outperforms gold,” LaForge noted. “This happened during the period from 1999 to 2011. This is typical… You can feel that gold wants to go higher next year. Gold has had a tough two and a half years,” the Wells Fargo executive explained further.

“Over the past few months, with all the talk of a Fed turnaround, gold has started to rally. Both gold and silver will be good next year. Silver may do better,” concluded LaForge. Silver is doing much better than gold against the dollar, with a 23.29% gain year to date, compared to gold’s 11.48% jump since November 3. Platinum is also up 915 an ounce from 56 days ago. from the dollar to the current 1051 dollars, it has risen considerably.

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What do you think of central banks’ demand for gold in 2022? Let us know what you think about this topic in the comments section below.

Jamie Redman

Jamie Redman is Head of News at Bitcoin.com News and a fintech journalist based in Florida. Redman has been an active member of the cryptocurrency community since 2011. He is passionate about Bitcoin, open source code and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about disruptive protocols emerging today.

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