Central Banks May Buy Less Gold In 2024: World Gold Council

Even though the Central Banks continued to accumulate gold in August with reported net purchases of eight tonne, the level has fallen to the lowest since March. A report by the World Gold Council (WGC) has stated that Central Banks may buy less gold in the ongoing year (2024) as compared to 2023 when they had bought 1,037 tonne of gold.

The report stated that just four central banks added net gold (of a tonne or more) to their reserves in August at a country level. The National Bank of Poland was the largest buyer, adding a net six tonne and lifting its gold holdings to 398 tonne. The Central Bank of the Republic of Turkey added three tonne to its gold reserves in August, its fifteenth consecutive month of net purchases, as per the report.

The Reserve Bank of India accumulated three tonne of gold, its eighth consecutive month of net buying. The report revealed that this makes India’s central bank the second-highest net purchaser of gold on a year-to-date (y-t-d) basis, with net purchases of 45 tonne.

On the other hand, the Central Bank of Kazakhstan reduced its gold reserves by five tonne in the month. Kazakhstan is now a net seller y-t-d, with gold holdings reduced by five tonne.

On a y-t-d basis, the emerging market (EM) central banks account for 70 per cent of total reported net purchases with Turkey making up 25 per cent of overall central bank buying thus far.

“Specially, 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 but will likely be below last year’s total,” stated Marissa Salim, Senior Research Lead, APAC, WGC.

The report revealed that August net purchases were the lowest since March when central banks reported a net sale of two tonne. It was also well below the 12-month average of 33 tonne.