When mentioning central banks purchasing gold, a few key players come to mind, like China, Uzbekistan, Singapore, and recently, Poland, but usually not Iran. Iran’s gold buying may not be as impressive as other nations on the list, but it’s consistent. The nation continues buying steady amounts of gold each month.
Iran has purchased 7.45 tons of gold valued at $475.59 million over the last six months. This six-month span completed the first half of the Iranian calendar, running from March 21 to September 22.
Iran’s gold imports during this six-month period made up 1.6% of the nation’s total imports during that time. Following this data, gold became the nation’s eighth-most imported item during the six-month span.
The Iranian gold import data comes from the Islamic Republic of Iran Customs Administration (IRICA). Just earlier this month, IRICA stated that all gold imports will be exempt from taxes starting on October 23. Mohammad-Hadi Sobhanian, the head of Iran National Tax Administration, directed this new mandate in accordance with tax laws.
Sobhanian’s argument for the new taxation law surrounds issues on previous gold imports. The government of Iran passed a law just last year to reduce gold imports as an attempt to lessen the impacts of U.S. sanctions against its economy.
With the passing of the latest law and the recent six-month import streak, it’s clear that Iran’s gold demand is continuing to rise. The reduced taxes will likely increase demand, which could lead to more imports.
In other news, nations around the globe are continuing to buy gold at exceptional rates.
According to the latest release from the World Gold Council on Gold Reserves by Country in Q2 2023, Western Europe currently holds the most reserves at 11,774.48 tons, with Germany, Italy, France, and Switzerland being key players. Next up is North America at 8,133.46 tons of gold, all of which are carried by the United States. The following regions included East Asia at 3,495.62 tons, Central and Eastern Europe at 3,470.83 tons, and the Middle East and North Africa at 1,506.58 tons.
“Gold is an important component of central bank reserves because of its safety, liquidity, and return characteristics – the three key investment objectives for central banks. As such, they are significant holders of gold, accounting for around a fifth of all the gold that has been mined throughout history,” the World Gold Council explained in its report.
During quarter two of 2023, the nation with the largest gold increases was Poland. Poland purchased 48.41 tons of gold, bringing it more than halfway through its 100-ton goal in just a couple of short months.
The second-largest gold buyer during the second quarter of the year was China, with its central bank stockpiling 45.1 tons of gold during the quarter. As of October, China has increased its gold reserves for 11 consecutive months, maintaining its title as one of the world’s top gold buyers.
Following China for the largest increases during the second quarter were the Czech Republic at 6.06 tons, the Russian Federation at 3.11 tons, and Singapore at 2.94 tons.
Turkey often switches between selling and buying gold. During 2023’s second quarter, Turkey ranked as the world’s top gold seller, exporting 132.23 tons of gold. Just behind Turkey in the top gold sales was Kazakhstan, exporting 18.5 tons of gold.
The World Gold Council’s report also revealed rankings for the most total gold reserves held per country. China ranked number one at the end of the second quarter, with a total of 2,113.46 tons of gold, equating to $129,937.39 million. At this point, China’s reserves accounted for 3.84% of its total reserves.
To put this into perspective, the Russian Federation, which ranked number six on the list, had a total of 2,329.63 tons of gold, accounting for almost 25% of its total reserves. China clearly has a lot more room for growth, hence its aggressive buying strategy lately.
The U.S. ranked number four on the list, with the total reserves amounting to 8,133.46 tons, or $500,051.32 million. In terms of gold holdings percentages, the United States nearly tops the list. Gold holdings account for 68.22% of America’s total central bank reserves.
The only nations beating the United States in terms of gold holdings percentages are Turkey (100%), Venezuela (82.96%), Portugal (68.92%), and Uzbekistan (68.57%).
As nations around the globe, including Iran, continue stockpiling gold, the precious metal enjoys sustained demand. As always, investors should consult their advisors before making any portfolio moves.