MAS' gold holdings up nearly 250% by value in 2023

The central bank's physical holdings of the precious metal have climbed by close to 50% in the first seven months of the year. Yet gold's share in the reserves portfolio remains small.
MAS' gold holdings up nearly 250% by value in 2023

Singapore’s central bank has been an active buyer of gold in 2023, which has helped boost the value of its gold holdings by close to 250%.

The Monetary Authority of Singapore (MAS) has purchased the shiny metal for six of the first seven months of the year, according to its monthly international reserves and foreign currency liquidity data.

Both the physical holdings and value of those holdings have climbed.

The value of gold holdings in MAS’s US$340 billion official foreign reserves (OFR) portfolio has soared by 249% to $4.6 billion at the end of July from $1.3 billion at the end of December 2022.

Holdings of the shiny metal by volume also climbed 48% to 7.3 trillion fine troy ounces from 4.9 trillion over the same period. One fine troy ounce is equivalent to 31.10 grams.

“The increase in gold holdings is much larger in value than in volume terms as we account for our physical gold holdings at cost,” a MAS spokesperson told AsianInvestor.

“A large part of our gold holdings in volume terms was acquired when MAS was first established, and gold prices have increased significantly since then. The change in gold holdings does not constitute a large proportion of the OFR portfolio.”

MAS’s gold purchases, while notably up this year, still account for just under 2% of its overall reserves portfolio.

Data source: MAS, World Gold Council


Gold prices increased by 5.4% between January and June 2022, closing June at slightly above $1,900 per troy ounce, according to the World Gold Council’s mid-year outlook.

“Gold outperformed all other major assets apart from developed market stocks,” the report said.

Gold’s performance was driven by a combination of factors including a relatively stable US dollar and interest rates, event risk hedging and continued central bank demand.

Central banks are significant holders of gold, accounting for around a fifth of all the gold that has been mined throughout history, according to the council, which tracks gold purchases and sales data.

Gold is an important component of centrai bank reserves because of its safety, liquidity and return characteristics – the three key investment objectives for monetary authorities.

“Central bank gold buying decisions are difficult to predict, but in general we believe that central banks will continue to be net buyers of gold for the remainder of this year,” said Shaokai Fan, head of Asia Pacific ex-China and global head of central banks at the World Gold Council.

Shaokai Fan

Central banks have typically accounted for 10-15% of annual net gold demand, Fan told AsianInvestor. “However, this jumped significantly to 23% in 2022.”

China’s central bank has added gold every month so far this year while Singapore and Poland have also been active buyers, said Fan.

Data source: MAS

Investment demand for gold, which includes both retail and institutional investment, usually accounts for 20-40% of annual net gold demand, while jewellery remains the largest segment of the gold market, making up almost half of annual net gold demand.


Persistent geopolitical tensions and macroeconomic uncertainty are ensuring gold’s relevance for asset owners.

“Planned purchases are primarily driven by increased buying of domestic gold production, rebalancing reserves to a more preferred strategic level, and concerns like financial crisis risks and high inflation,” Wei Li, multi asset quant solutions portfolio manager at BNP Paribas Asset Management.

While central bank demand remains strong, gold buying has slowed compared to 2022 along with ETF outflows, as forecasts for a Federal Reserve policy pivot is pushed out to next year, this slower central bank activity may put downward pressure on gold prices through late 2023 and early 2024,” Li said.

Central banks have been net buyers of gold annually since 2010, coinciding with the gradual decline of the US dollar as the dominant global reserve currency, said Li.

“This year, developing countries have driven most visible gold acquisitions, aiming to decrease dollar asset exposure and diversify from low-yielding reserve currencies.”

Wei Li
BNP Paribas AM

Central banks continue to view gold favorably as a reserve asset, according to the World Gold Council's 2023 survey earlier this year.

Gold should experience stronger investment demand if economic conditions deteriorate. A soft landing or much tighter monetary policies, however, could result in disinvestment.


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