Gold Digger: Central banks want EVEN MORE GOLD as boom goes on

• Gold prices are sitting near record highs
• Central bank demand has been a big reason, topping 1000t in each of the past three years
• And a survey of the world’s central banks shows they see that trend continuing

Gold prices have absolutely sky-rocketed in the past two years, soaring from under US$2000/oz in late 2023 to more than US$3350/oz today and, at one point in April, as much as US$3500/oz.

That’s great news for gold equities and their investors.

A sizeable portion of that price move could be flimsy, locked into safe haven demand based off temporary responses to signs of global economic and geopolitical instability – Trump’s tariffs, the TACO trade (Trump Always Chickens Out – a gag from Wall Street that the Prez HATES), war in the Middle East and Ukraine.

But a large driver, underwriting the gold price according to many analysts, has been demand from central banks.

Sovereign buyers of bullion have hoovered up, on a net basis, around 1000t of gold in each of the past three years, well above historic levels.

The eighth annual central bank reserves survey from the World Gold Council, released this week, suggests central banks are even more bullish about the commodity now than they have been at any point since it launched.

Around 95% of central banks buyers expect central banks to increase their gold reserves this year, up from 81% last year, with 76% thinking gold will be a larger proportion of global reserve assets in five years compared to today, up from 62% last year.

43% of respondents have concrete plans to increase their gold reserves in the next 12 months, up from just 29% last year.

That comes despite the extraordinarily high cost currently of buying gold, WGC global head of central banks and head of Asia-Pacific (ex-China) Shaokai Fan said.

“After eight years of conducting this survey, we have reached an important milestone: nearly half of the central bank respondents intend to increase their own gold holdings in the coming year. This is remarkable, especially considering how many record-high prices we’ve hit so far in 2025,” he said.

“Notably, this reflects the current global financial and geopolitical environments. Gold remains a strategic asset as the world faces uncertainty and tumult. Central banks are concerned about interest rates, inflation, and instability – all reasons to turn to gold to mitigate risk.”

Drivers

The desire to acquire more gold is even higher in emerging markets, with 48% of the 58 surveyed saying the plan to increase their gold reserves over the next 12 months, compared to just 21% of advanced economy respondents.

84% of EMDE (emerging markets and developing economies) who responded said inflation was behind their rationale for holding gold, with 81% pointing to the geopolitical situation.

Across advanced economies, those were key factors for 67% and  60% of respondents, respectively.

Those geopolitical fears are reflected also in where gold is being stored, with domestic storage of bullion up from 41% to 59% as a prepper mentality sets in. Around 73% of respondents also see moderately or significantly lower US dollar holdings in global reserves over the next five years.

That could happen in lockstep with higher Euro and Renminbi holdings, as economic turmoil, US debt levels and trade unpredictability from the new US Administration prompt foreign central bankers to diversify from the universal store of value.

Notably, no central bankers think their gold holdings will decrease this year, with 3% of respondents having indicated plans to sell gold in 2024 and 2023.

“Taken together, these findings clearly highlight that gold sentiment within the central banking community remains positive,” the report authors said.

“Expectations point to continued gold buying over the next 12 months, reflecting sustained confidence in gold’s strategic role amid evolving geopolitical and macroeconomic dynamics.”

87% of EMDEs and 77% of advanced economy central banks pointed to gold’s performance during a time of crisis as a key reason for holding gold, while 92% of advanced economy central banks say it’s because of their historical position.

Winners and losers

Here’s how ASX-listed precious metals stocks are performing:

Zuleika Gold (ASX:ZAG)

Mark Creasy backed Zuleika Gold has a bone to pick with $1.5 billion ASX gold miner Catalyst Metals (ASX:CYL) through no smaller a forum than the WA Supreme Court … actually it’s a bone that’s already been picked with Vango Mining, which Catalyst acquired a couple years back.

It’s going to head there in October this year to find out the quantum of damages payable by Catalyst after the Supreme Court found in March 2022 that entities now owned by Catalyst had wrongfully repudiated a JV agreement which “prevented Zuleika from earning up to 50% of the beneficial interest” in the tenement hosting the K2, K1 and PHB-1 prospects and the K2 Area at its project in the Plutonic gold district.

“It has taken five long years to get to this stage but, on behalf of and for all Zuleika Shareholders, I am pleased we can finally present to the Supreme Court the significant opportunity lost to us when the Catalyst Entities breached Zuleika’s rights under the BTS Agreement,” Zuleika exec chair Annie Guo said.

“This includes denying Zuleika’s immediate beneficial interest in 4.1% of the Tenement and K2 Area, and therefore 4.1% of the underlying gold resource, and denying Zuleika the opportunity to earn in up to a 50% interest in the Tenement and K2 Area in alignment with the terms of the BTS Agreement.

“We long ago identified the potential and prospectivity of the Tenement and K2 Area and are not surprised that – today – they are earmarked to underpin the future of the Plutonic Gold Project.

“The Court has already confirmed that Zuleika was denied its rights under the BTS Agreement – and dismissed the Catalyst Entities’ appeal – so Zuleika’s focus now is to ensure we receive fair value for what is owed to us.

“Zuleika will provide further updates as this long-running litigation finally reaches its conclusion.”

The 81,000oz K2 underground is now a planned satellite for Catalyst’s Plutonic gold mine, with Zuleika claiming for losing the right to 50% of the K2 project, and unpaid entitlements under the sale agreement and royalty deed listed at $6m, legal costs and the transfer of a 4.1% beneficial interest in the tenement and K2 Area.

Catalyst meanwhile has tried to distance itself from the situation, saying the Zuleika announcement, which references incidents that happened long before it acquired Vango Mining in 2023, is just the statement of trial dates and “conveys no new or material information”.

It says the dates have been known to Zuleika and Catalyst since they were set on April 11. “As to why these dates have only become material to Zuleika now is not known to Catalyst,” the company said.

“The Board of Catalyst considers this to be nothing more than an attempt to generate publicity and exert leverage against the defendants in the context of the forthcoming Supreme Court hearing,” CYL told the ASX.

Cazaly Resources (ASX:CAZ)

Cazaly was up there in the past week after starting RC drilling at the Duke of York gold prospect.

The 2000m drill program will test beneath historical gold workings at the target, part of its Goongarrie gold project to the north of Kalgoorlie.

Historical drill intercepts at Duke of York included strikes of 13m at 3.5g/t and 8m at 10.7g/t on the margin of mafic and sedimentary rock under the old Duke of York workings.

“I am extremely pleased to announce that drilling has commenced at Duke of York, the first of many gold targets to be tested in this highly prospective district,” MD Tara French said.

“Our team has worked extremely hard to obtain approvals which places us on the ground less than 3 months after exercising the option to earn up to 80% of the Goongarrie Gold project with Brightstar Resources (ASX:BTR).

“It’s a very exciting time to be drilling beneath historical gold workings in the eastern goldfields, and we can’t wait to see the results of this first drilling campaign.”