Net acquisitions were reported at 8 tonnes, the lowest since March. The biggest buyers were Poles, Turks and Indians. The Central Bank of Kazakhstan reduced its gold holdings by 5 tons.
While the Central Bank (BCRA) debated with analysts and opposition the benefits and risks linked to the management of the gold reserveswhich at the beginning of last month gave rise to a brief statement confirming the transfers of part of those reserves, in the rest of the world central banks continued to satisfy their appetite for the precious metal. Thus, the latest statistics show that Central banks continued to accumulate gold last August, with reported net purchases of 8 tonnes. However, this is the lowest level of net purchases since last March, when financial institutions reported a net sale of 2 tons, but also well below the 12-month average of 33 tons.
“While overall demand has eased from early 2024 highs, gold reserve accumulation remains positive, with activity concentrated in emerging market central banks,” notes former Preqin economist Marissa Salim. . In relation to the prominence of these central banks, it is worth highlighting that in annual terms they represent 70% of the total reported net purchases, with Türkiye leading with 25% of total central bank purchases through the third quarter of the year.
More gold in reserves: Warsaw in the lead
At the country level, only four central banks added net gold (of a ton or more) to their reserves in August, and they were the Polish, Turkish, Indian and Czech. On the part of the National Bank of Poland, which was the largest buyer with a net total of 6 tons, they allowed it to increase its gold reserves to 398 tons. In this regard, it is worth remembering that Poland maintained its trajectory of net purchases during the last five months, with 39 tons of gold in this period.
On the other hand, The Central Bank of the Republic of Türkiye added 3 tons to its gold reserves, marking its fifteenth consecutive month of net purchases. Turkey’s role in the world gold market is unavoidable given that in accumulated terms, the Turkish central bank is the largest net buyer, adding 52 tons of gold, which represents around 35% of its total reserves. While on the side of Reserve Bank of India (RBI), in August accumulated 3 tons of gold, being its eighth consecutive month of net purchases. This makes the RBI the second largest net buyer of gold on an annual basis, with net purchases of 45 tonnes.
The other notable buyer was the Czech National Bank (CNB) which added 2 tons of gold in August, chaining its eighteenth consecutive month of net purchases. It is worth noting that the CNB has accumulated 33 tons of gold during this period, bringing its total gold reserves to 45 tons.
The other way around: those who reduce gold reserves
On the other side of the sidewalk, appears the Central Bank of Kazakhstan, which in August reduced its gold reserves by 5 tons, thus adding the fourth consecutive month of net sales and leaving its gold reserves at 290 tons, which is approximately 55% of the total reserves. The year-to-date balance shows that Kazakhstan is now a net seller, with gold reserves reduced by 5 tons.
For Salim, now senior director of research in APAC, although central bank activity in August was noticeably slower, Gold price performance is not an important strategic factor for central bank purchasesso its constant upward trend could have influenced the slowdown. However, “it is worth noting that sales have not increased, which may indicate a likely wait-and-see attitude rather than a change in trend. Especially because all the other key factors of central bank decision-making, such as the need for effective diversifiers and the performance of gold in times of risk, remain in force,” he clarifies.
Gold market: outlook
In general, the market consensus expectation remains positive for the rest of the year, but the annual balance will probably be lower than that of 2023. Of course, recent war events may lead to a recalculation of perspectives. It happens that geopolitical risks have increased in recent years and tend to cause stock markets to sell off.
This is why gold proved to be a safer haven asset during the geopolitical crisesoffering better returns during these events. It is those key attributes of gold such as its safe haven nature, its ability to generate long-term returns – especially now that a global easing cycle has begun – and its low correlation with risk assets, which raise expectations among investors. , especially those looking to build a resilient portfolio in today’s world. Central banks, in addition to ETF funds, important players in the global gold market, come into play in this game.
Source: Ambito
I am Pierce Boyd, a driven and ambitious professional working in the news industry. I have been writing for 24 Hours Worlds for over five years, specializing in sports section coverage. During my tenure at the publication, I have built an impressive portfolio of articles that has earned me a reputation as an experienced journalist and content creator.
