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  • Central banks resume gold buying in October
  • Central banks resume gold buying in October

    3 December, 2020

    Following two consecutive months of net sales, central banks resumed buying in October: global official gold reserves rose by 22.8t on a net basis. Levels of buying remained consistent with the previous two months, but selling activity was far reduced. As we noted in our Q3 Gold Demand Trends report, Q3 2020 was the first quarter of net sales since Q4 2010, largely due to hefty sales from Uzbekistan and Turkey. This prompted a renewed focus on central bank gold demand and whether it signalled a change in mindset towards gold accumulation.


    Gold (+18.6% y-t-d1) has continued to outperform many other traditional reserve assets this year, providing central banks with the added firepower needed to stabilise markets and currencies amid unprecedented levels of uncertainty. While it is unsurprising to see some selling, given gold’s role as a safe, liquid reserve asset, the continued accumulation by central banks underscores its importance to central bank portfolios.

    Familiar banks continue to drive demand.2 At a country-level, activity in October was concentrated among a familiar roster of emerging market central banks, a trend which has been in place for some time. Gross purchases totalled 25t in October, with five central banks almost entirely responsible for this growth: Uzbekistan (8t), Turkey (7t), UAE (6t), Qatar (2t), and India (2t). In contrast, gross sales were just under 3t during the month, with Mongolia for accounting for the majority of this.

    Y-t-d, central bank net purchases continue to sit between 200-300t. Buyers have outnumbered sellers so far in 2020 (9 vs 8), with buying coming from several countries that mostly have relatively low ratios of gold-to-total reserves, demonstrating a continued appetite to grow gold holdings at a strategic level.

    The full central bank gold reserves dataset can be downloaded here.



    Calculated using the LBMA Gold Price PM as at 1 December 2020

    Country-level commentary includes net purchases/sales of a tonne or more only.