MAS gold reserves climb 45% in three months

Singapore’s central bank has added to its gold holdings in the first three months of this year, reinforcing its position as the top institutional buyer of the shiny metal for the quarter.

The Monetary Authority of Singapore's (MAS) gold reserves increased to 7.15 million fine troy ounces at the end of March from 4.94 million troy ounces at the end of December, official monthly reserves data showed.

That's equivalent to a 45% increase in reserves of the shiny metal over that period, equivalent to about 69 tonnes.

The value of those reserves have soared more than 200% as gold's market prices have climbed in recent months. MAS accounts for gold at cost.

MAS has repeatedly bought gold in January, February and March. The biggest monthly jump came in January, when it boosted the precious metal's reserves by close to 30%.

It underlines the notion that the city-state’s central bank was the single largest buyer of gold in the quarter ended March, according to the World Gold Council.

“The additional 69 tonnes, the first increase in its gold reserves since June 2021, confirms that buying in Q1 was not only the domain of emerging market central banks,” a report from the World Gold Council said.

Before 2023, Singapore’s central bank purchased gold in May/June 2021, when it bought 26 tonnes, according to the World Gold Council (WGC).

Holdings stayed constant for over a year before the central bank started to increase its reserves of the yellow metal this year. Gold holdings with MAS at the end of March amount to about 222 tonnes.

“Gold remains appealing to asset owners including central banks as economic concerns such as inflation and geopolitical instability have contributed to the growing demand,” said Robin Tsui, SPDR ETFS APAC gold strategist at State Street Global Advisors.

“We anticipate emerging market and Asian central banks to be among the major purchasers of gold in 2023, and central banks will continue to be net gold buyers in 2023.

"Driven by the rising risk of recession, and the potential weaker US dollar going forward as the Fed is likely to pause rising rates sometime in the second half of 2023, we remain bullish on the outlook of gold as a result of increasing safe-haven buying and may  potentially see gold breaking its all-time high (US$2,075 per troy ounce) in the coming months,” Tsui told AsianInvestor.

Gold holdings accounted for 1.9% of MAS’s US$235 billion portfolio at the end of March.

When asked by AsianInvestor if the central bank had any plans to further increase gold holdings, the central bank referred what it previously said – the changes are part of ongoing efforts to enhance the resilience of the official foreign reserves portfolio such that it remains well-diversified through economic and market conditions.