The World Gold Council has released its Gold Demand Trends report for the third quarter of the year and it shows that between January and September of 2023, central banks purchased 800 tons of gold, marking the highest amount purchased on record for the nine month span.

In the third quarter report, the industry group said there was a 14% year over year increase in the net buying of bullion over the first nine months of the year.

World gold demand, not counting over-the-counter (OTC) trading was up 8% over its five year average through the third quarter. However it slipped 6% off the all-time high seen last year, according to the report.

The data from the World Gold Council showed that the largest buyer of gold this year has been China, which has been on an 11-month buying streak. Other buyers of note were Poland, Singapore, Türkiye, Russia, and India.

The trend of emerging economies increasing their purchases of gold follows a global trend of central banks de-dollarizing, and transitioning away from the use of the dollar as a reserve currency.

Central banks across the world have been moving away from the use of the dollar and euro in international cross-border trade settlement, following Washington’s attempt to cripple the Russian economy by denying Russia access to Western financial mechanisms through the application of sanctions, as well as the freezing of billions of dollars which Russia had been holding in reserves.

Other countries, which had become dependent on the use of the US dollar or euro as a means of settling cross border trade transactions, grew fearful their dependency could be leveraged against them, as it was in the case of Russia. In response, they moving away form the use of the dollar, and seeking alternative means of settlement, from use of third party currencies such as the yuan, to utilizing local currencies for trade settlement.