Don’t stop me now: central bank demand in August

Goldhub blog

Don’t stop me now: central bank demand in August

Krishan Gopaul
Market Intelligence Group
World Gold Council

Posted:

Today we have published our latest central bank data for August. As usual, I’ll be summarising the key highlights. But if you want to dig a little deeper, you can find our central bank data set here.

Gross purchases (of a tonne or greater) amounted to 62.1t in August, while gross sales were 4.8t by comparison. As a result, net purchases came to 57.3t. This is significantly higher than the modest demand of 12.8t in July. As we’ve spoken about previously, global uncertainty remains elevated with little indication that it will fall anytime soon. Against this backdrop, central banks continue to see a role for greater levels of gold in their reserve portfolios.

Same same, but different. Unlike previous months however, where we’ve seen several active purchasers, gross purchases in August were concentrated amongst four central banks. Of the total gross purchases, Turkey’s sizeable addition (+41.8t) to its gold reserves account for around two-thirds. Russia (11.3t), China (5.9t) and Qatar (3.1t) were the others that grew gold reserves by a tonne or more. Gross sales – again, totalling a tonne or more – were limited to two central banks: Kazakhstan (2.6t) and Uzbekistan (2.2t).

On a net basis, reported year-to-date purchases – of a tonne or more – now total over 450t. Of this, a total of 14 central banks have increased their gold reserves so far in 2019, compared to only two that have decreased their gold reserves. Should central banks remain net purchasers this year – which is looking like a racing certainty – it’ll also mark a decade since they switched from being net sellers.