Central Banks and other institutions

Gold Demand Trends Q2 2018

1 August, 2018

Central Banks and other institutions

Central bank net purchases in Q2 were 7% lower y-o-y, but 8% higher y‑o‑y in H1

  • Q2 central bank net purchases were 7% lower y-o-y, totalling 89.4t
  • Net purchases over H1 were 8% higher than the previous year
  • Net purchases continue to be driven by Russia, Kazakhstan and Turkey
Tonnes Q2'17 Q2'18 YoY
Central banks & others 96.4 89.4 -7%

Central banks added 89.4t (on a net basis) to global gold reserves in Q2, down 7% y-o-y. While the pace of purchasing lags that of recent years, volumes remain healthy. Looking at H1, net purchases totalled 193.3t, 8% higher than the same period last year.


Russia, Kazakhstan and Turkey led H1 net purchases; 8% higher y-o-y

GDT Q2 2018 - Central Banks - Chart: Russia...

Source: Metals Focus; GFMS, Thomson Reuters; World Gold Council

Data as of

Purchases in Q2 and H1 were dominated by the familiar trio of Russia, Kazakhstan and Turkey. Russia again led the way, accumulating a net 53.2t in Q2, 49% up on Q2 2017. This brought H1 net purchases to 105.3t (5% y-o-y), and gold reserves to 1,944t at the end of June (17% of total reserves). Russia’s voracious appetite for gold is strategic – amidst geopolitical tensions it looks to diversify away from the US dollar.

Kazakhstan continued its lengthy buying run. The central bank continued its monthly buying, with the result that gold reserves grew by 11.6t during Q2 to 20.7t (3% y-o-y). The country’s gold reserves have now grown for 68 consecutive months. At the end of the quarter there were calls in Kazakhstan’s lower house of Parliament for the bank to further increase gold reserves in the face of geopolitical and economic risks, and uncertainty arising from the global shift towards a multicurrency system.

Turkey’s central bank further increased gold reserves, albeit at a slightly slower pace. H1 net purchases totalled 38.1t (+82% y‑o‑y) after net purchases of 8.3t (-60% y‑o‑y) in Q2. Despite the lower level of purchases in recent months, Turkey retains its strategic commitment to gold. Gold reserves totalled 240.2t at the end of June, 107% higher than when net purchases began in May 2017.1

The Reserve Bank of India (RBI) bought 2.5t of gold in March, following a fractional 0.3t addition in December.2 These increases in gold reserves are the first since November 2009, when the RBI purchased 200t from the IMF. Currently, there is little to suggest this is indicative of a strategic move, but it is noteworthy given how long the level of gold reserves have been unchanged.

During H1, the State Oil Fund of the Republic of Azerbaijan (SOFAZ) added around 2.8t of gold to its portfolio. This is the sovereign wealth fund’s first purchase of gold since Q4 2013, with gold reserves now standing at 33t.

Once again, net reductions remained trivial in relation to increases. Among the handful of central banks that reduced their gold reserves in H1, Venezuela was the most significant. Gold reserves have declined 11.9t in H1 2018 (accounted for solely in January) in response to the perilous economic situation facing the country.3 However, it was later reported that Venezuela sought to recover some gold lost through the lapsed swap at the end of 2017. Gold reserves in Australia (4.1t), Qatar (Xt), Germany (3.8t), Sri Lanka (2.4t) and the Ukraine (1.2t) have also declined in H1.


  1. Excludes gold holdings accumulated through the Reserve Option Mechanism policy.

  2. This purchase was announced after the release of the last Gold Demand Trends report.

  3. IMF gold reserve data for Venezuela is only available to end-March 2018.

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