Central Banks Slow Down Gold Purchases in August
Central Banks Slow Down Gold Purchases in August
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Central banks around the world have continued to buy gold, but their pace has slowed significantly, possibly due to the recent rise in gold prices, according to the World Gold Council (WGC).
Central banks around the world have continued to buy gold, but their pace has slowed significantly, possibly due to the recent rise in gold prices, according to the World Gold Council (WGC).
In August, central banks collectively bought only 8 tonnes of gold, a sharp decline from the 12-month average of 33 tonnes. This is the lowest net purchase since March, when there was a net sale of 2 tonnes.
In August, central banks collectively bought only 8 tonnes of gold, a sharp decline from the 12-month average of 33 tonnes. This is the lowest net purchase since March, when there was a net sale of 2 tonnes.
Key Players in Gold Accumulation
Only four central banks added a tonne or more of gold to their reserves in August. Poland led with 6 tonnes, maintaining its buying streak for the past five months. Turkey, India, and the Czech Republic also increased their gold reserves, adding 3 tonnes, 3 tonnes, and 2 tonnes respectively. Year-to-date, Turkey is the largest net purchaser with 52 tonnes, followed by India with 45 tonnes.
Kazakhstan, on the other hand, reduced its gold reserves for the fourth consecutive month, selling 5 tonnes in August. This brings its total gold holdings to 290 tonnes, which is about 55% of its total reserves.
Insights from the World Gold Council (WGC)
Marissa Salim, WGC’s senior research lead for APAC, noted that while gold’s rising price isn’t the main reason for central banks' purchases, it might have contributed to the slowdown. She emphasized that the lack of increased sales suggests a cautious approach rather than a shift in strategy. Central banks still value gold for its role as a diversifier and its performance during times of risk.
Marissa Salim, WGC’s senior research lead for APAC, noted that while gold’s rising price isn’t the main reason for central banks' purchases, it might have contributed to the slowdown. She emphasized that the lack of increased sales suggests a cautious approach rather than a shift in strategy. Central banks still value gold for its role as a diversifier and its performance during times of risk.
Salim remains optimistic about gold purchases for the rest of the year, though she expects the total to be lower than last year’s figures.
Salim remains optimistic about gold purchases for the rest of the year, though she expects the total to be lower than last year’s figures.
“ While gold’s price performance is not a top strategic driver for central banks purchase, its consistent upward trend could have influenced the deceleration.
However, it is worth noting that sales have not increased, which may signal a likely wait and see approach rather than a change in trend. Specially, since all other key drivers of central bank decision making, such as the need for effective diversifiers and gold’s performance in times of risk remain in place.
In all, our expectation remains positive for the rest of the year but, as we previously discussed, will likely be below last year’s total, ”
- Marissa Salim, WGC’s senior research lead for APAC
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