Central Banks Hoarding Gold: Silver Could Outperform in 2023

• The People’s Republic of China has been buying gold at a record pace, leading to central banks hoarding the precious metal at the fastest pace in 55 years.
• According to Wells Fargo’s head of real asset strategy, John LaForge, silver could outperform gold in 2023.
• China recently purchased 1.03 million ounces of fine gold in November, making it the sixth largest country in terms of gold reserves held.

The global demand for gold has been on the rise in recent years and the People’s Republic of China has been at the forefront of this movement. According to World Gold Council (WGC) statistics, the demand for gold by central banks has risen at the fastest pace in 55 years. This surge in gold buying has been largely driven by the Chinese government, with the State Administration of Foreign Exchange revealing that the country purchased 1.03 million ounces of fine gold in November.

This massive gold purchase has made China the sixth largest country in terms of gold reserves held, with 63.67 million ounces of gold worth $112 billion. The gold buying spree in China has caused a significant shift in the global gold market, pushing the price of a troy ounce of .999 fine gold up 11.48% from $1,629 per unit in November to $1,816 per ounce today. Silver has also seen an increase in value, with a troy ounce of .999 fine silver increasing 23.29% from $19.45 per unit in November to $23.98 per ounce.

Wells Fargo’s head of real asset strategy, John LaForge, believes that silver could potentially outperform gold in 2023. LaForge contends that when silver starts outperforming gold, it usually signals it is „closer to a bull market in precious metals versus the other way.“ This prediction should come as no surprise given the current state of the gold market, with central banks buying hoards of the precious metal and pushing prices higher.

The gold buying spree in China and other central banks over the last year have had a profound effect on the global gold market. This surge in demand for gold has caused the price of gold to increase and has made China the sixth largest country in terms of gold reserves held. Wells Fargo’s head of real asset strategy, John LaForge, believes that silver could potentially outperform gold in 2023, signaling a potential bull market in precious metals. With the world’s central banks hoarding large sums of gold, investors should be aware of the potential upside of investing in both gold and silver.