Central banks may scale back gold purchases in 2024, reports World Gold Council
Mon Oct 07 2024
Central banks may buy less gold in 2024 compared to 2023, when they had bought 1,037 tonnes of gold, according to a World Gold Council report. Central banks reported net purchases of 8 tonnes of gold in August – the lowest since March. The National Bank of Poland was the leading buyer in the month, followed by the Central Bank of the Republic of Turkey and the Reserve Bank of India (RBI).
The Central Bank of Kazakhstan reduced its gold holdings by 5 tonnes in August.
Central banks have continued to accumulate gold in August with reported net purchases of 8 tonnes. While overall demand has tapered from the early 2024 highs, accumulation of gold reserves remains positive, with activity concentrated in emerging market (EM) central banks, said Marissa Salim, Senior Research Lead, APAC, World Gold Council
August net purchases were the lowest since March when central banks reported a net sale of 2 tonnes; it was also well below the 12-month average of 33t.
On a y-t-d basis, EM central banks account for 70% of total reported net purchases with Turkey making up 25% of overall central bank buying thus far.
Reported central bank activity in August was markedly slower. While gold’s price performance is not a top strategic driver for central banks' purchases, 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. Especially, since all other key drivers of central bank decision-making, such as the
need for effective diversifiers and gold’s performance in time of risk remain in place.
In all, our expectation remains positive for the rest of the year will likely be below last year’s total, said Marissa Salim.
Source: https://economictimes.indiatimes.com/