Central banks are boosting stockpiles of gold in their reserves amid a backlash against the dollar

• Central banks boosted their gold stockpiles amid a backlash against the dollar.
• Global reserves grew by 228.4 tons in the first quarter, the World Gold Council reported.

Central banks around the world are boosting stockpiles of gold amid a growing backlash against the dollar.

In the first quarter, 228.4 tons of gold were added to global reserves, the World Gold Council reported on Friday. While that marks a 40% decline from the fourth quarter, it's a 176% increase from a year ago.

It also marked a new record high for the first three months of any year, topping the prior first-quarter record, which was set in 2013, by 34%.

"This is all the more impressive considering it follows the record-breaking pace of demand last year," the report said.

The top gold buyers in the first quarter were largely in Asia. Singapore's central bank led the way with purchases of 69 tons, followed by China with 58 tons, Turkey with 30 tons, and India with 7 tons, according to the WGC.

Meanwhile, updates from Russia's central bank showed a decline of 6 tons during the quarter — possibly due to coin minting— though the total is 28 tons higher from last year, it added. Separate indications recently have pointed to Russian gold flooding into the UAE, Turkey and Hong Kong.

The US dollar traditionally has been a mainstay of central bank reserves. But the recent surge in demand for gold has been seen as a sign of de-dollarization after the greenback became weaponized to put financial pressure on Russia for its war on Ukraine.

"Thus the oldest and most traditional of assets, gold, is now a vehicle of central bank revolt against the dollar," Ruchir Sharma, chair of Rockefeller International, wrote in The Financial Times last month.

And the WGC said Friday that central bank purchases of gold remain robust, with little indicating the trend will change in the short term. It reiterated its view that gold buying will continue to outweigh selling as the second quarter begins.

Meanwhile, the price of gold has been closing in on a fresh record high, though it pulled back closer to $2,000 on Friday. Gold is up 11% so far this year and up 25% from a November low.

The rise is the result of a significant flight to safety among investors, Bob Haberkorn, a senior market strategist at RJO Futures, told Insider.

In his view, this comes as the Federal Reserve has had trouble taming high inflation, while its aggressive interest rate hikes have stirred turmoil in the banking sector and lifted the potential for a credit crunch.

"So basically, buying gold right now is almost a bet against the Fed," he said, later adding that "the Fed is not in a position to be much more aggressive for too long on rates."